Houston Business Closing & Taking Your Cash

I’ve covered this story too many times this year. A business files for bankruptcy and closes its doors, keeping customer’s deposits or products that were supposed to be delivered. In a bankruptcy, the customer loses. We have to stand at the back of the line in bankruptcy court and file just like all of the other creditors the business owes money.

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But in this case, I have confirmed that Dermacare of Willowbrook is closing this Saturday, December 6th. I’ve already received a couple of emails from concerned customers:

I am a patron of that establishment and have been for at least two (2) years.  In fact, I have money and services that I paid in advance for skincare packages in their holding account.  I understand that they are closing the doors this Saturday.  Of course, there is no possible way for me to receive the services and products due me before Saturday.  While I think it is unfortunate that they feel they must close their doors, I understand that they were selling packages for services up until this week.  Also, I received an invitation to their open house for Thursday, December 4th that advertised their sales on skincare packages.  Is that not a type of fraud?                                                                                                          -Lisa

I am a consumer that went to Dermacare at Willowbrook to have some facial rejuvination and injections done.  I have bought the product (they keep it there for you) Perlayne and Botox to a tune of $2700.00.  My best friend called me to tell me that Dermacare is closing this Saturday Dec. 6.  I have unused product at that location and have made an appointment to have the rest injected (before they close).  I went ahead and made an appointment for this Thursday to have the rest injected.  Are they operating under a false pretense since he is still taking appointments and didn’t say they were closing?   Can I recover the money I spent?  There are a lot of people who go to Dermacare in Willowbrook that don’t know of this.  We need to get the word out fast!

I, too, called Dermacare in Willowbrook. The man who answered told me with some hesitation that his store is closing on Saturday. He said customers owed money can file in bankruptcy court to get refunds. He suggested I call his attorney. I did. She sent this statement by email just a few minutes ago:

 

 

Mr. Brawny has determined that with the current economy and the businesses lack of cash flow, the business he is operating cannot continue. He is orderly shutting it down. Saturday will be the last day it is in operation. He is attempting to notify all customers with prepaid accounts and allow them to either come in for treatment or products by Saturday. Unfortunately there are not sufficient funds to pay all of customers with prepaid accounts. A Chapter 7 bankruptcy case will be filed for the company as soon as possible (probably next week). A Chapter 7 Trustee will be appointed by the court. All of the customers with claims and all of the vendors with claims will be notified and invited to file a claim. Consumers with deposits are given priority treatment up to a specific dollar amount under the Bankruptcy Code. That means that they will be paid before the general creditors. The Trustee will liquidate all of the companies assets and after payment of his or her expenses, will disburse first to the priority creditors on a pro rata basis, and then to the general unsecured creditors on a pro rata basis. I hope this helps you with your question.

Barbara M. Rogers

Rogers, Anderson & Bensey, PLLC

That just stinks! Usually when I hear about a company like this, it has already closed and is not taking calls- much less still drawing in customers! So I called a consumer attorney in town to ask him what you should do if Dermacare has your money. Here is his response:

 

 

If he does in fact file bankruptcy, nothing they do now will matter because it would all be undone by the bankruptcy court. On the other hand, if they file a claim in small claims court, and he doesn’t file bankruptcy they will be better off. They would also be better in bankruptcy if he didn’t file until after they won in small claims court finally, depending on what happened, he could be individually liable under the Texas Deceptive Trade Practices Act, even if his business filed bankruptcy. Bottom line, if he files personal bankruptcy and files for his company, customers can only file a claim with the bankruptcy court and probably will get nothing. If the business files alone, customers can file a claim in bankruptcy court against the business, but could still have a claim against him. (For example, if he took their money knowing he was going to file).

I know, I know… you didn’t want to go to court. But that is why it’s there.

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One Response

  1. Unfortunately, Dermacare has been the subject of much debate on my site at Medical Spa MD, a blog for physicians practicing nonsurgical cosmetic medicine. In fact, this one single post on Dermacare medspas has more than 1,151 comments, most by franchisees who are going out of business and blame the Dermacare franchise.

    It’s a losing deal all around.

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