abc carpet & home

Information for Creditors of abc carpet & home

Jointly Administered Under Case Number 21-11591 in the United States Bankruptcy Court for the Southern District of New York


  • A.B.C. Carpet Co., Inc.
  • A.B.C. Home Furnishings, Inc.
  • A.B.C. Oriental Carpets, Inc.

Together, the three Debtor companies do business as abc carpet & home (“ABC”). The company’s flagship store is located at 888 Broadway, New York, New York 10003. They also have a store in Brooklyn, New York, at 220 36th Street. The abc carpet & home store in New York City’s Flatiron District is an iconic location within New York and beyond. It is not simply a store, but is designed to be an experiential marketplace with high-end finishes that are focused on sustainable design and ethical sourcing. This dedication to best practices has been pushed hard by Paulette Cole, the great-granddaughter of the founder, who was head of the company from 2003 through 2019.

In addition to selling merchandise through its iconic stores, ABC offers products through its online marketplace, Due to the nature of the Debtors’ business and the design of its physical store, most of ABC’s sales have historically come from people who visit the New York storefronts. Since the new CEO, Aaron R. Rose, took over from Ms. Cole in May 2019, he has been working on shifting the Debtors’ business more towards online sales.


In the papers that initiated the Debtors’ bankruptcy cases, they indicated that they have approximately $10-50 million in assets as compared to $50-100 million in liabilities. Included in those liabilities are creditors that number in the thousands. Additionally, the Debtors have disclosed that their liabilities may grow, including by taking out additional money to fund their sale process in bankruptcy. There is also the potential that the Debtors will incur WARN Act liabilities due to possible mass layoffs of their employees.

As of the filing of the bankruptcy cases late in the night of September 8, 2021, the Debtors report owing around $8 million in secured debt obligations, $15 million in unsecured loans, $40 million in unsecured loans owed to insiders, and around $5.2 million in trade debt. They have asked the Court’s permission to borrow an additional $5.7 million in secured debt as a “DIP” loan, or a debtor-in-possession loan, to fund the costs of operations until a sale can be approved, the bankruptcy cases, and the marketing/sale process.

In addition to these debts, ABC states that it allegedly owes $3.5 million in rent to an affiliate. However, it disputes that it actually owes this rent due to unfulfilled obligations by the landlord and due to impeded access to the abc home & carpet store caused by construction that was done at the direction of the landlord. This dispute will likely be settled by the bankruptcy judge.


While the Debtors have indicated that they need urgent permission from the Court to borrow funds, their reason for incurring additional debt is to sustain their operations pending a sale. The Debtors hope that they can avoid laying off their employees and disappointing their customers by selling the business as a going concern. This means that the Debtors hope that the store can keep operating consistently while the business is marketed and sold. If all goes well, the day-to-day customers of ABC should not even notice that anything is changing while the company proceeds through bankruptcy.

On the other hand, creditors of ABC should be paying close attention to this case. At this point, the Debtors have reported that they have or are about to have somewhere near $78 million in debt. They will run a sale process but the opening bid for the Debtors’ assets, provided by 888 Capital Partners, LLP, will be a “credit bid” of roughly $15 million plus only $300,000 in cash and the assumption of some liabilities of the Debtors. The assumption of liabilities does not include pre-petition claims of unsecured creditors. The credit bid will cancel secured debt but will not give any return to unsecured creditors.

Given that the Debtors hope to complete their sale no later than October 31, 2021, creditors must act fast if they hope to improve their position in this case. If you have questions about this case or a bankruptcy sale process in general, please feel free to reach out to PRLT.

PRLT does not represent abc carpet & home or any of the affiliated Debtors. The content on this page is provided for informational purposes only. Nothing on this page or this website creates an attorney/client relationship between you and PRLT. Nothing on this page is legal advice. If you have any questions about the ABC Carpet jointly administered bankruptcy case or anything discussed on this page, please contact us.

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