Chapter 7 Only Option for Maligned Maryland Retailer

The much-maligned Blue Hippo Funding, an electronics sales company based in Maryland, was forced into filing Chapter 7 bankruptcy.

The company initially filed for Chapter 11 bankruptcy protection, but its payment processors bank stopped the company from accessing its funds.

This left the company unable to pay their creditors. Blue hippo requested a Delaware Bankruptcy Court to release the funds so the company could make their payments, but the request was denied. With few other options, Blue Hippo made the decision to go into liquidation.

The bankruptcy filing said the company “will not be able to satisfy administrative expenses that will continue to accrue these cases one maintained in Chapter 11.”

The company had been in hot water prior to the decision to file Chapter 7.

According to the Baltimore Sun, the Federal Trade Commission accused the company of having deceptive practices, overcharging for their electronics, and failed to deliver sold products to low income customers.
Several lawsuits were filed against the company which may have contributed to the current situation.

Two years ago, the Maryland Attorney General’s office settled a case in which Blue Hippo paid out a $3.5 million in restitution to its customers. As a part of the settlement, Blue Hippo could no longer sell their products in the state of Maryland.

One year ago the company paid another $3.5 million settlement with the Federal Trade Commission (FTC).
Recently the FTC said the company was in “contempt of its settlement.” They claim Blue Hippo was selling computers to the customers, but not delivering the products they paid for.

They said less than one percent of Blue Hippo’s customers received their already-paid-for products.

How the system allegedly works is that the customer makes a down payment for the product they purchase and then they make regular monthly payments to the company. After the 13th week, the product should then be delivered to the customer.

But many did not receive the products they paid for, according to the FTC.

The Chicago Sun Times reported the Better Business Bureau received over 4,000 complaints against the company over the last three years.

With all the lawsuits and settlements to Blue Hippo’s customers, the payments processor then put a stop on all the funds which ultimately led the company to file for Chapter 7 bankruptcy.