Kathleen G. Kane - Pennsylvania Office of Attorney General - Protecting Pennsylvanians

July 18, 2014

Attorney General Kane: Lawsuit filed against Philadelphia-based online furniture retailers, owners

HARRISBURG - Attorney General Kathleen G. Kane announced today that her Bureau of Consumer Protection filed a lawsuit against two online furniture retailers and their owners on behalf of consumers across the country whose orders were allegedly unfulfilled by the companies. The lawsuit seeks an injunction against the owners to stop their alleged misconduct.

Those named in the action include MIG Enterprises Inc., which operated under the name Furniture XO; Salada Enterprises Inc., which operated under the name Furniture PM; and their owners Matthew Kolodesh and Nellie Tsan.

Attorney General Kane said the Philadelphia-based companies allegedly took money from consumers for furniture purchased on their websites but failed to deliver the furniture.

According to the lawsuit, Furniture XO suffered cash flow problems and, as a result, the defendants used money from new consumers to pay for orders they placed with the manufacturers and/or distributors to fulfill orders from earlier customers or to provide refunds to earlier customers. This ultimately caused significant delays in the order fulfillments.

The defendants also allegedly opened Furniture PM in an attempt to fulfill outstanding orders from Furniture XO and to provide refunds to the consumers.

The lawsuit alleges that the defendants never recovered from their cash flow problems and in many cases failed to submit the furniture order to the manufacturer or distributor, failed to deliver the consumers' furniture and failed to provide refunds to the consumers who paid for furniture but did not receive it.

The lawsuit was filed in the Philadelphia County Court of Common Pleas by Deputy Attorney General Sarah A. E. Frasch of the Office of Attorney General's Bureau of Consumer Protection.

Consumers who believe they may have been harmed by these companies' business practices are encouraged to call the Bureau of Consumer Protection at 1-800-441-2555 or file a complaint at www.attorneygeneral.gov.

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