San Diego-based luxury appliance retailer Pirch owes $100M-$500M to creditors: court docs

In bankruptcy filings submitted to the U.S. Bankruptcy Court for the Southern District of California, the high-end appliance retailerPirch estimated it had 1,000 to 5,000 creditors and owed anywhere from $100 million to $500 million, while estimated assets are in the $10 million to $50 million range.

Pirch, a San Diego County-based manufacturer, has filed for Chapter 7 bankruptcy, according to court filings obtained by NBC 7.

The company, which had a handful of showrooms in Southern California, including one in Solana Beach and another in La Jolla, said in a statement on their website that they closed their showrooms on March 20 as “a pause of business to give management the opportunity to complete a go-forward plan.”

The statement claims showrooms would be closed through the weekend; however, they never reopened.

“I think this is like a horror story,” Whitney Solomon, the owner of Whit at Home, told NBC 7. “I don't think I’ve heard of anything like this ever happening.”

Solomon has been working in the interior design industry for a decade and used Pirch for many projects. She said it was a place to get practically anything you would need for a remodel, from refrigerators to stoves to lighting to bathroom fixtures.

But when a recent order for a client started to take longer than expected, Solomon said she sensed trouble.

“We couldn't get ETAs on things that we had been waiting months for,” Solomon said, “and [we] kind of started feeling like it was sketchy.”

Solomon tried visiting a Pirch showroom to get the order figured out. The items did eventually arrive, but not without further issues for her client.

“I would say they’re out, like, about $25,000, in total,” Solomon said.

The losses are for a range they were awaiting delivery on as well as other expenses that were incurred while problem-solving in the meantime.

Now, Solomon explained, not only is her client out thousands of dollars she may never get back, there are even worse problems Pirch has left behind.

“We’re friends with a lot of people in the industry that have had, you know, several clients with several large outstanding orders of $50,000 to $150,000,” Solomon said. “So they're kind of scrambling at this point.”

Pirch’s management will need to explain precisely what went wrong, Michael O’Halloran, a San Diego-based bankruptcy lawyer, told NBC 7.

“Management can see that they're not going to be able to make money in the future, such that they can pay old debts,” O’Halloran said on Tuesday. “Then there's no way to save the company. So, it's dead and there are many options about what to do. Chapter 7 is one.” 

O’Halloran looked over the related filings from Pirch and said he did not see anything that jumped out as unusual, but added that court watchers will need to wait for what comes out during the legal proceedings. He said he heard it all in his decades of bankruptcy-related legal work, from interest rates expanding too rapidly to, in some cases, embezzlement.

“It will be interesting to learn what the management says,” O’Halloran said. "What was the cause here? Because we're not in an economic downturn."

As for whether the lowest-level of creditors, which would include homeowners and interior designers, can expect to get money back, O’Halloran said it would take a “miracle.”

“People can get a little money back, if all the other big dogs get paid first,” O’Halloran said," but it's not looking good. It never is in a case like this, because their assets are their brand and their stores. They don't even own the stuff in the stores, probably. So, when you go to sell it out, there's not a lot there.”

NBC 7 reached out to Pirch but has not heard back.