Church Furniture Store owners answer financial questions under oath in creditors meeting
Business filed for bankruptcy, owes $3.4 million
ROANOKE – The owners of Church Furniture Store in Rocky Mount who failed to fill paid orders of more than 100 churches were questioned under oath Friday during the case's first creditors meeting held in Roanoke.
As 10 News has reported, the Franklin County business filed for bankruptcy in January after they failed to deliver furniture to paying customers across the country.
Owners Sam Rakes and his wife, Jodi, refused to comment about the case on camera.
"They don't have a statement,” said a friend of the couple who didn’t give his name but later said he was a former employee. He attempted to block 10 News' camera from recording the couple as they walked on public property in downtown Roanoke while leaving the creditors meeting. Cameras and recording devices were not allowed in the meeting.
"Get out of my way," he said to a 10 News photographer when he was asked not to step on the photographer’s feet.
The meeting was open to more than 300 creditors owed money. The room was filled with several members of local churches looking for answers. The Rakes answered questions under oath asked by the trustee Steven Higgs.
"We came up with a to-do list of things that I need. We are just starting to investigate this so we came up with a list of things for them to produce to me," Higgs said.
One of the items Higgs questioned the couple about, is page 75 of the 124-page bankruptcy document which details the tens of thousands of dollars they paid themselves before filing for bankruptcy. According to the documents, the payments are listed as shareholder distributions and income total more than $88,000.
Higgs took questions from several representatives of churches owed money. Several were very emotional.
“It's a good-size case for the Western District. It's a good-size case for a Chapter 7,” Higgs said.
Chapter 7 means what's left of the church furniture store will be auctioned off to pay back more than $3.4 million owed. That includes the shipments of chairs churches paid for, but are stuck at the port in Norfolk because of nonpayment from the business. The shipments require thousands of dollars in payment to be released. Once they are released, they will be put up for auction, not given to the churches.
“I understand that these are people who raised money, took donations from their church members, placed orders, or placed deposits on furniture that they wanted for their places of worship. I'm sensitive to the emotions of that. Money doesn't fix everything but that's the only thing that I can deal with,” Higgs said.
Employees who haven't been paid wages will be given first priority to receive money.
It is unlikely those owed will receive all their money back.
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