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Art Van family gets more time to respond to lawsuit alleging fraud

Candice Williams
The Detroit News

The family of Art Van Furniture’s founder has been given more time to respond a federal lawsuit that alleges members doomed the Warren-based business due to transactions they allegedly made during the company’s sale to a private equity firm in 2017.

The deadline for the heirs of the late Art Van Elslander to respond is June 10.

A document filed Thursday in U.S. Bankruptcy Court for the District of Delaware says the family members acknowledged that the complaint was properly served to them but they may seek the dismissal of a trust established by Van Elslander, who died in 2018, and his estate “on grounds that such entities do not exist and therefore cannot properly be named as defendants and/or served with process.”

Attorneys for the Van Elslanders were not immediately available for comment.

Read more: Behind Art Van's crumbling empire: Family stripped company of millions, lawsuit claims

The lawsuit, filed last month by Alfred Giuliano, the Chapter 7 bankruptcy trustee of Art Van Furniture LLC, alleges that the Van Elslanders harmed the Warren-based business by making more than $105 million in "fraudulent transfers" through real estate deals during Art Van's sale to a private equity firm for $620 million in 2017. The company would later file for bankruptcy and shutter its doors in 2020.

Giuliano is seeking to recover more than $105 million from the family — including Art Van Elslander's estate.

The Van Elslander family has denied any wrongdoing, saying that when it sold Art Van in 2017, the company was debt-free. They called the lawsuit an unfair attempt to solve problems the buyer caused.

“Make no mistake, the bankruptcy proceedings may be labeled ‘Art Van,’ but this is about the consequences of business decisions made by the company that purchased our family business in 2017,” the Van Elslander family wrote in a statement last month.

Boston-based Thomas H. Lee Partners, which bought Art Van Furniture, is not a party in the lawsuit.