Whiteford, Taylor & Preston Obtains $6.625 Million Recovery for Bankrupt Furniture Manufacturer and Retailer from Directors and Certain Officers
Baltimore - Whiteford, Taylor & Preston LLP's (WTP) pursuit of claims against the former directors and certain officers of The Rowe Companies and its two subsidiaries, Rowe Furniture, Inc. and Storehouse, Inc., has resulted in a $6.625 million settlement for the firm's clients, Donald F. King, the Chapter 7 Bankruptcy Trustee of Rowe Furniture, Inc., and Guy A. Davis, the Chief Liquidation Officer of bankrupt Storehouse, Inc. and the Liquidating Trustee of The Rowe Companies. WTP's Special Counsel Litigation Group was retained by the bankruptcy estates in the cases pending in the United States Bankruptcy Court for the Eastern District of Virginia, and utilized a team of attorneys led by Kevin G. Hroblak, a partner in the firm's Bankruptcy Litigation section who concentrates on corporate governance and accounting malpractice litigation. The Special Counsel Litigation Group at WTP is a nationally reputed practice that provides bankruptcy-related commercial litigation services, and offers unique fee structures, to assist lead and general bankruptcy attorneys in cases throughout the Country.
"This case was yet another instance where board members of a financially troubled business allegedly failed to fulfill basic fiduciary duties owed by a director - to responsibly manage the affairs of the company and protect the value of the company for creditors," explained Hroblak. "It was not simply a matter of being ill-informed about proposed business transactions; it was believed to be affirmative company neglect and mismanagement."
The parent company that was established in 1946 achieved net shipments of over $295 million and gross profits of more than $103 million before it encountered financial and operational difficulties in 2004. Hroblak said, "[r]ather than recapitalizing and restructuring the companies' finances in a timely and constructive fashion, the directors were alleged to have failed to exercise their fiduciary duties owed to the entities and creditors." "This settlement will provide substantial assets to the bankruptcy estates and enable creditors to enjoy a meaningful recovery," added Hroblak.
The attorneys at Whiteford, Taylor & Preston are dedicated to helping our clients achieve their business goals through strategic legal counsel. We serve our clients across the nation and around the globe, wherever your business takes us, from our base of six offices in the mid-Atlantic region. For more information, please visit our website at www.wtplaw.com.