How do we get our money back from this closed business?
February 23, 2016 11:07 AM   Subscribe

My partner had about $400 of credit at a huge music store in Montreal. We read in the paper today that it closed down forever about 5 days ago without any notice to anyone. How could he go about getting his money back (as cash or stuff from there)?

We are aware that there are probably other people who are owed more, and other companies who will need to also be paid. How does this work? $400 is obviously too small to get a lawyer, but to us it's actually a lot of money to lose just like that. Is there a standard procedure or are we just out of luck?

posted by andreapandrea to Work & Money (8 answers total) 1 user marked this as a favorite
Were any of the purchases on a credit card? You can try charging them back as items paid for but never delivered. I'm not a lawyer, and this isn't legal advice, but typically there is a process for creditors to file claims with the court in which the bankruptcy petition was filed, which you should probably do because it doesn't cost more than a stamp. Be advised, though, that businesses that fold frequently auction off everything and there is still just pennies on the dollar, if anything, remaining after the bankruptcy trustee, lawyers, auctioneers, etc. get paid, because they *will* get paid before you. If you're really, really lucky they find someone else to take over the business and they might give you something as a gesture of goodwill.
posted by wnissen at 11:12 AM on February 23, 2016 [2 favorites]

Store credit, you mean?
posted by Riverine at 11:17 AM on February 23, 2016

Store credit is not "same as cash". Your SO was probably offered cash or credit upon exchange, and took the credit based on the size of the figure versus the ROI from cash. They will probably not be able to get anything.
posted by parmanparman at 11:26 AM on February 23, 2016 [8 favorites]

Not five feet from where I'm sitting is a Tower Records gift certificate. I'm not sure if I should keep it as a historical object or throw it away, but regardless it's just a piece of paper now.
posted by rhizome at 11:48 AM on February 23, 2016 [3 favorites]

Not sure how it works in Canada, but if a store went bankrupt in the US, it likely would have to make a court filing and there would be creditors lining up to get at the liquidating proceeds. In would be done pro rata unless someone owned some debt that was above general creditors. If this is a huge store and not just some guys moving out of town in the night, call their landlord and ask what he is doing.
posted by AugustWest at 12:23 PM on February 23, 2016 [1 favorite]

unless they have other locations,

you're out of luck. if they had any money or credit left they'd still be in business. Any assets will be fought over by people who are owed many more digits than you and probably have secured debts.

if they do have other locations, call them and use your credit asap.

take it as an expensive learning lesson.
posted by TheAdamist at 12:30 PM on February 23, 2016

The store still exists in the form of some business trustee probably just a lawyer, whose job it is to discharge the debts of the store. I don't know how you'd locate that person, but that's who you need to talk to, in order to try to get yourself on the list of debtors.

I don't think they'll honor store credit with no store, though. Your partner probably didn't realize that store credit takes a risk on the solvency of the store, because that's not the kind of thing one thinks about. Likewise, taking cash is to take a risk on the solvency of the currency which is, to its credit, more solvent than record stores.

However, there may well be some inventory of the store somewhere, and maybe your partner can recover some items worth some or all of the credit from that -- valuable to your partner, or valuable for resale to get some cash value.
posted by Sunburnt at 4:05 PM on February 23, 2016

Someone posted to reddit about the same store: they had brought a piece of equipment in for repair and it’s now in limbo. Best advice seems to be to find out who the bankruptcy trustee is and make a claim.
posted by zadcat at 7:05 PM on February 23, 2016 [1 favorite]

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