BY LISA BIANK FASIG
The Cincinnati Enquirer
Sun Television and Appliances, which filed for bankruptcy protection Wednesday, said it probably will close its six Cincinnati-area stores within a matter of weeks, affecting as many as 450 workers and countless consumers.
As the chain retrenches, shoppers of the electronics and appliance chain should be aware of the rules of shopping from a retailer in Chapter 11.
Sun will continue operating 30 smaller stores -- one in Hamilton -- but layaways and warranties are at risk until the company emerges from bankruptcy. A company spokeswoman already said Sun cannot honor its own warranties, though it will honor third-party warranties. Also, consumers who ordered goods are at the mercy of vendors, who will ultimately decide whether to deliver.
"If it's been paid for, Sun's going to make every effort to deliver it," spokeswoman Melodye Demastus said. But "it's largely up to the vendors."
For these reasons, lawyers say consumers who shop at Sun should do so prudently.
"There's certainly no reason why people can't go and buy merchandise and even charge it," said Louis Solimine, a attorney for Thompson, Hine and Flory.
"(But) when you leave the store, you should have the merchandise with you."
It helps to recall the situations at Swallen's and Steinberg's. Many shoppers who ordered furniture from Swallen's before the stores abruptly closed never received the merchandise or a full refund. There also are scores of Steinberg's customers who now hold useless or less-valuable warranties.
In bankruptcy, the secured creditor -- usually a bank -- is first in line to collect outstanding debts. Whatever is left is divided among nonsecured creditors, such as vendors, usually at pennies on the dollar. If the parties are repaid in a way that satisfies the bankruptcy court and creditors, the company can emerge and operate as before.
The money Sun raises as it closes 29 unprofitable stores is earmarked first for its secured creditor, Bank Boston Retail Finance Inc. Ms. Demastus said customers who brought items in for repair should call Sun for merchandise pickup. The retailer will try to return all items covered by a third-party warranty in working order. She also suggested that shoppers with extended service policies call (800) 730-5262.
Sun also is making claims forms available for consumers, to be filed with bankruptcy court.
