North Carolina furniture chain Mitchell Golrd + Bob Williams converted its Chapter 11 bankruptcy to a Chapter 7 liquidation Friday after a ruling by the U.S. Bankruptcy Court of Delaware. 

Judge Laurie Selber Silverstein said the conversarion to Chapter 7 was in the best interest of the debtors, their estates, creditors and all other interested parties.

CBS News reported that "$50 million in customer deposits have vanished in the dramatic collapse" of Mitchell Gold. And, now just customer's lost money. According to the report, workers who were promised two months of severance pay after they were laid off in a WARN letter have not been paid.

According to a report in Sourcing Journal, on Sept. 8, when Mitchell Gold filed Chapter 11 bankruptcy, it suggested that unsecured creditors would be able to collect on their debts because it thought it was going to get funding to make it through the legal process. Financing would have helped it make good on customer orders, too.

But the bankruptcy was fraught with tension between Mitchell Gold and PNC Bank, its primary secured lender. PNC wanted the company to quickly sell assets to satisfy its claims, and it won that fight on Friday.

According to the report, it is unclear if the claims will be resolved. The Chapter 7 liquidation lowers the chances that customers will get either their deliveries or a refund. A new trustee to manage the liquidation will oversee the sale of assets and how proceeds will be disbursed to secured creditors. It can’t be determined at this time if there will be anything left for unsecured creditors, the Sourcing Journal reported.

Mitchell Gold + Bob Williams has abruptly shut down its operations telling its employees by letter and email that the company has "recently and unexpectedly learned that we are unable to secure critical financing to continue business operations.

"In the wake of this unfortunate development, the Company will sadly need to wind down operations and terminate the employment of our employees beginning on August 26, 2023."

The company posted signs on the truck gate and office door of the Taylorsville plant at One Comfortable Place off Millersville Road dated Saturday, August 26.