By
OBSERVER File Photo
Pictured is Bush Industries Inc. sign at its Mason Drive facility. The company and BESTAR Inc., one of its affiliates, are suing a third party seller over money Bush alleges it is owed.
Bush Industries and BESTAR Inc., an affiliate of Bush, are going to court in an attempt to receive more than $110,000 the company says it is owed.
Bush filed its suit Tuesday in state Supreme Court in Mayville seeking payment for $68,585.70 the company says it is owed by Homethreads.com LLC to Bush Industries and another $57,659 owed to BESTAR Inc. In addition to Homethreads.com LLC, the lawsuit names Brad Bruckner and Neil Marcus, founders of Homethreads, and Antoine Grant, the Los Angeles-based businessman who purchased Homethreads in May 2023. Also named is HT (ABC) LLC of San Ramon, Calif.
Third-party sellers have become increasingly popular over the past several years as online shopping has increased, including Amazon and Walmart. Retailers will reach agreements to have their products sold on websites like Amazon or walmart.com, accept money on behalf of the store that makes the merchandise and then turn money over to the retailer later. Homethreads started as an e-commerce company strictly selling direct-to-consumer decorative bedding and accessories in 2017.
Homethreads was selling Bush Industries products on its website, with furniture ordered on Homethreads.com sent directly by Bush and BESTAR Inc. to the purchaser. Once the money was received from customers it was supposed to be passed on to Bush Industries by the internet retailer. Bush Industries’ lawyers say that hasn’t happened since Nov. 1, 2023.
“Defendant Marcus continually misrepresented to plaintiffs the state of Homethreads’ finances, indicating at the end of January that payments were scheduled to be made and insisting that Homethreads was dedicated to honoring its commitments,” the lawsuit states. To date, plaintiffs have received none of the payments Defendant Marcus insisted were scheduled. “At the time Defendant Marcus was assuring plaintiffs that they would be paid, Defendant Marcus and his partner, Defendant Bruckner, knew Homethreads was insolvent and these statements were made with actual intent to mislead and defraud plaintiffs into shipping more furniture for which defendants had no intention of paying.”
Bush’s attorneys allege Bruckner and Marcus kept the money paid by customers before announcing in January 2024 that they were withdrawing from day-to-day operation of Homethreads. Grant then Assignment for the Benefit of Creditors notice with HT (ABC) LLC as the assignee. According to the American Bar Association, an Assignment of Benefit of Creditors is often used as a business liquidation device for insolvent debtors as an alternative to bankruptcy proceedings. Homethreads.com is no longer active while its Facebook page hasn’t been updated since late March.
Laws governing LLCs typically protect individual business owners and officers from personal liability when it comes to business dealings, though there are some exceptions that include if the owner personally guarantees the debt, if there is proof the owner or officer fraudulently mishandled company finances or if the court decides to “pierce the corporate veil” and hold the owner personally liable. Piercing the corporate veil typically happens only if a business owner is found to have conducted business illegally or fraudulently, if personal and business funds are commingled or if proper corporate procedures aren’t followed.
Attorneys for Bush and BESTAR are arguing for state Supreme Court Justice Grace Hanlon to make such a decision against Homethreads and its owners. While no evidence has been introduced as part of the lawsuit, Bush and BESTAR lawyers argue Marcus and Bruckner kept the money from Homethreads.com sales of Bush and BESTAR furniture for personal use.
“Defendants Marcus, Bruckner and Grant abused the privilege of doing business in a corporate form such that they are personally liable for the obligations of Homethreads and HT (ABC) LLC as its successor,” attorneys Charles Ritter Jr. and Nicole Joerg of Duke, Holzman, Photiadis and Griesens LLP in Buffalo argue on behalf of Bush and BESTAR.
