PHILADELPHIA - Victims of an online furniture seller who failed to deliver items purchased on the website will receive a portion of $50,000 in restitution, according to a settlement agreement reached last month between the Pennsylvania Bureau of Consumer Protection and the owners.
Matthew Kolodesh and Nellie Tsan will pay the combined amount as the owners of MIG Enterprises Inc., which operated under the name Furniture XO. Tsan (also of Salada Enterprises Inc.) will provide an additional $35,000 in restitution for consumers.
Kolodesh agreed not to operate or control any company from a location in Pennsylvania or any company outside of Pennsylvania that would deal with Pennsylvania consumers.
The Philadelphia-based online furniture company allegedly took money from consumers for furniture purchased on its website and failed to deliver the furniture, according to the complaint.
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.