American Home Furniture files for Chapter 11 protection, closes northern New Mexico stores

Albuquerque-based American Home Furniture & Mattress has filed for Chapter 11 bankruptcy protection, seeking to rearrange its finances amid construction challenges and economic pressures.

The locally owned and operated furniture company, which has stores in Albuquerque, Santa Fe and Farmington, announced the Chapter 11 filing in a statement on its website this week, saying the intention of the filing is “to strengthen our company and ensure long-term stability.”

Chapter 11 protection allows a company to stay in business while it restructures its finances and operations, which can still include some closures. It differs from Chapter 7 bankruptcy, which corporations pursue when they are unable to repair their finances and must liquidate all assets.

In its statement, the company emphasized that its two Albuquerque stores remain open, operational and are working to fulfill all existing and new orders.

Its two stores in Santa Fe and Farmington, however, are closing, as the company said it is “consolidating operations, with floor model sales underway” in the two northern New Mexico stores. Customers in those areas, the company said, will be served by its Albuquerque locations and delivery services.

“Farmington has never really been a big contributor, and it’s very expensive to keep product up there, to find sales people (and) to make deliveries,” said CEO and owner Kenton Van Harten in an interview. “With Santa Fe, we lease all of our spaces and the building is very old and in very poor condition. We’re just not in the position to spend millions of dollars to renovate a building that we don’t own.”

The CEO said the stores will likely close within the next month. Collectively, the stores employ roughly 20 of the company’s 94 workers. The Santa Fe and Farmington staff have been offered jobs in Albuquerque, Van Harten said.

“Some have accepted those; the others — we’ll see what they decide,” he said. “The idea is to make the company stronger and preserve as many jobs as we can.”

The company’s decision to file for Chapter 11 reorganization follows more than a year of freeway construction along the stretch of Interstate 25 near its store at 801 Comanche NE in Albuquerque. The company said the lengthy project — expected to take two more years to complete — has impacted its Albuquerque operations.

“I go there every day and sometimes I don’t even know how to get in there,” Van Harten said of the Comanche location. “It’s also impacted the other store on Carlisle because people are just adjusting their drives. They don’t want to go there.”

But the company said “broader economic pressures,” including inflation and tariffs, were also contributing factors. The filing comes two years after the company relocated its Carlisle store to a former Kmart that it gutted and renovated.

Court documents, filed with the U.S. Bankruptcy Court for the District of New Mexico on Wednesday, show the company has $1 million to $10 million in estimated liabilities, compared with $1 million to $10 million in assets.

The filings list fewer than 50 creditors, with the largest unsecured creditor being 801 Comanche LLC, owed $328,319 in rent for February and March. The company also owes the New Mexico Taxation & Revenue Department $217,659 in sales taxes for December and January. Many of the remaining top 20 unsecured creditors are vendors.

The debtor, American Home Furniture, will ultimately propose a court-approved plan to repay creditors without liquidating assets. The debtor’s reorganization plan must be accepted by a judge and the majority of its creditors.

“We had a court hearing yesterday, which was very positive,” Van Harten said. “In the (grand) scheme of things, we don’t have a lot of debt that we owe vendors, so we’re hopeful this gets resolved fairly easily.”

Van Harten has led American Home Furniture as CEO for more than two decades and has owned it for roughly 12 years. The company, founded by Emanuel "Mannie" Blaugrund, is in its 90th year of selling furniture, mattresses and home decor in Albuquerque and throughout New Mexico.

The company joins other Albuquerque-headquartered companies that have initiated a Chapter 11 process in recent months, including Electric Playhouse — specifically for its Las Vegas location, which is not affecting its New Mexico operations — and Bosque Brewing Co.

Bosque’s reorganization attempt was unsuccessful, resulting in the closure of all its taprooms after a judge tossed its case, while Electric Playhouse’s case is ongoing.

Van Harten is optimistic American Home Furniture will have a beneficial outcome and move through the reorganization process “as soon as possible.”

“We want to stay in business, we want to keep people employed. I think our vendors want the distribution,” Van Harten said. “We’ve been around for 90 years, and we want to be around for the next 90.”

Kylie Garcia covers retail and real estate for the Journal. You can reach her at kgarcia@abqjournal.com.