Two local companies tied to Allen Mead Ferguson and his wife, Mary Rutherfoord Mercer Ferguson, filed Tuesday for bankruptcy protection.
Although still viable businesses, Mercer Rug Cleansing Inc. and George-Marshall Corp. each declared Chapter 11 bankruptcy because they were used as collateral on loans tied to the Fergusons’ personal finances.
The family — known for Allen Ferguson’s ties to an old-Richmond investment bank and the couple’s philanthropic efforts — filed Chapter 11 bankruptcy March 31.
The bankruptcies will protect the real estate and assets of the businesses and prevent the banks from coming after them as collateral until the Fergusons are able to restructure their financial obligations through the Chapter 11 process.
“Everything is just completely intertwined as far as the loans with the banks,” said David Spiro, an attorney with Hirschler Fleischer who is handling the businesses’ bankruptcies. “The underlying real estate on both companies was pledged on bank loans tied to their personal finances.”
Mercer Rug and George-Marshall Corp. are family businesses that were once run by Mary Ferguson’s father, George Mercer. Mary Ferguson is now the president and sole stockholder of the companies.
Mercer Rug, which specializes in Oriental rug cleaning, has been around since 1936. It listed assets of between $1 million and $10 million in its bankruptcy filing and debts in the same range.
The bulk of Mercer Rug’s debts is $1.53 million owed to Eastern Virginia Bank.
George-Marshall Corp. is a holding entity that owns the real estate occupied by Mercer Rug at 3116 W. Moore St. and Victory Rug Cleansing, another family company, at 407 S. Cherry St. and 811 Albemarle St.
George-Marshall also owns two residential rental properties locally, Spiro said. Its only debt is $799,251 owed to Union First Market Bank.
“Mercer Rug is doing fine,” Spiro said. “These filings are not a reflection on the performance of the companies.”
Victory Rug is also still in business, Spiro said. It has not filed bankruptcy, although a foreclosure sale on the property on which it sits had been scheduled by Union First Market for this week. That sale was held up because of the bankruptcy filings.
Because all three cases are so intertwined, Spiro said, a motion will soon be filed to consolidate the personal and business bankruptcy cases.
The two rental properties owned by George-Marshall are set to be sold in May, Spiro said, and the proceeds will flow to the banks that loaned the family money.
Roy Terry of DurretteCrump is still handling the Fergusons’ personal bankruptcy.
“This is part of the overall plan of Mr. and Mrs. Ferguson to pay their creditors,” Terry said.
Two local companies tied to Allen Mead Ferguson and his wife, Mary Rutherfoord Mercer Ferguson, filed Tuesday for bankruptcy protection.
Although still viable businesses, Mercer Rug Cleansing Inc. and George-Marshall Corp. each declared Chapter 11 bankruptcy because they were used as collateral on loans tied to the Fergusons’ personal finances.
The family — known for Allen Ferguson’s ties to an old-Richmond investment bank and the couple’s philanthropic efforts — filed Chapter 11 bankruptcy March 31.
The bankruptcies will protect the real estate and assets of the businesses and prevent the banks from coming after them as collateral until the Fergusons are able to restructure their financial obligations through the Chapter 11 process.
“Everything is just completely intertwined as far as the loans with the banks,” said David Spiro, an attorney with Hirschler Fleischer who is handling the businesses’ bankruptcies. “The underlying real estate on both companies was pledged on bank loans tied to their personal finances.”
Mercer Rug and George-Marshall Corp. are family businesses that were once run by Mary Ferguson’s father, George Mercer. Mary Ferguson is now the president and sole stockholder of the companies.
Mercer Rug, which specializes in Oriental rug cleaning, has been around since 1936. It listed assets of between $1 million and $10 million in its bankruptcy filing and debts in the same range.
The bulk of Mercer Rug’s debts is $1.53 million owed to Eastern Virginia Bank.
George-Marshall Corp. is a holding entity that owns the real estate occupied by Mercer Rug at 3116 W. Moore St. and Victory Rug Cleansing, another family company, at 407 S. Cherry St. and 811 Albemarle St.
George-Marshall also owns two residential rental properties locally, Spiro said. Its only debt is $799,251 owed to Union First Market Bank.
“Mercer Rug is doing fine,” Spiro said. “These filings are not a reflection on the performance of the companies.”
Victory Rug is also still in business, Spiro said. It has not filed bankruptcy, although a foreclosure sale on the property on which it sits had been scheduled by Union First Market for this week. That sale was held up because of the bankruptcy filings.
Because all three cases are so intertwined, Spiro said, a motion will soon be filed to consolidate the personal and business bankruptcy cases.
The two rental properties owned by George-Marshall are set to be sold in May, Spiro said, and the proceeds will flow to the banks that loaned the family money.
Roy Terry of DurretteCrump is still handling the Fergusons’ personal bankruptcy.
“This is part of the overall plan of Mr. and Mrs. Ferguson to pay their creditors,” Terry said.
This is very BAD FAITH on the part of the Fergusons. What is the point of pledging collateral for a loan if you can just bankrupt the holding company? It’s easy to screw a bank, since no one sheds tears for them these days. It seems that EVB can’t catch a break.