SUBSCRIBE NOW
$1 for 3 months. Save 97%.
SUBSCRIBE NOW
$1 for 3 months. Save 97%.

Supplier sues Loves Furniture, claims $1.8M in unpaid bills

Jordyn Grzelewski
The Detroit News

Loves Furniture, which last year reopened numerous shuttered locations of longtime Michigan retailer Art Van Furniture, is facing a lawsuit from a supplier that claims the company owes nearly $2 million for merchandise it purchased.

The lawsuit, filed Dec. 31 in the U.S. District Court for the Eastern District of Michigan on behalf of Southern Motion Inc. and Fusion Furniture Inc., alleges breach of contract on the part of both Loves and U.S. Assets Inc., the Dallas-based private equity firm that owns it. 

Loves Furniture is closing 13 of its locations, including 10 stores in Michigan. The store on Hall Road in Shelby Township will remain open.

Mississippi-based Southern Motion makes and sells furniture to retailers across North America, according to the seven-page filing. Fusion Furniture is a subsidiary.

The lawsuit comes amid financial struggles for Loves, which announced last month that it would close 13 of its locations, including 10 stores in Michigan. In making the announcement, CEO Mack Peters cited the coronavirus pandemic and a furniture shortage as challenges in serving Loves' clients: "We're reducing our footprint of the number of stores to better serve our clients in the Detroit area."

Slated for closure are stores in Westland, Waterford Township, Livonia, Burton, Saginaw, Bay City, Muskegon, Dearborn, Port Huron and Petoskey.

The consolidation plan, which also includes stores in Ohio and Pennsylvania, comes just months after the Royal Oak-based company opened in Michigan, after U.S. Assets acquired the inventory and assets of more than two dozen former Art Van stores amid Art Van's Chapter 7 bankruptcy case.

Art Van Elslander founded the first of the Warren-based retailer's stores in 1959. It eventually grew to about 190 stores across nine states. In 2017, the furniture and mattress retail chain sold to Boston-based private equity firm Thomas H. Lee Partners.

Art Van announced last March that it would close all of its company-owned stores and liquidate its inventory. Amid the pandemic, the company soon after laid off its employees and suspended all sales.

The Loves brand was founded in 2020.

The lawsuit filed by Southern Motion and Fusion Furniture claims they entered into an agreement with Loves last June, and that later that month U.S. Assets guaranteed "payment of all amounts more than 30 days past due owed by Loves Furniture to plaintiffs for the six-month period beginning on June 30, 2020 and ending on December 31, 2020, not to exceed $2 million." The plaintiffs claim U.S. Assets also agreed to reimburse them for any costs "incurred in connection with the enforcement of the guaranty."

The complaint alleges that Southern Motion and Fusion Furniture sold furniture to Loves between August and October, issued invoices for the merchandise that had to be paid within deadlines ranging from 30 to 45 days, but that Loves "failed to timely pay" and still owes more than $1.8 million collectively to the two entities.

"On December 1, 2020, Plaintiffs sent a written demand to U.S. Assets for payment of the guaranteed amount," the complaint states. "Despite demand, U.S. Assets has failed to pay the guaranteed amount."

The plaintiffs are asking the court for a judgement requiring Loves and U.S. Assets to pay back the amount owed, plus interest, costs and attorneys' fees.

Southern Motion and Fusion Furniture are represented by Michigan-based Varnum LLP and Alabama-based Maynard Cooper & Gale.

A message left Monday with a Loves Furniture representative was not immediately returned.

jgrzelewski@detroitnews.com

Twitter: @JGrzelewski