A Remodeling company with 70 years of experience of history announced the cessation of operations without prior notice.
Different Customers those who had paid in advance for renovations fell by the wayside, without knowing where your money is or how to claim it.
The private equity-controlled parent company Renovo Home Partners also filed for bankruptcyDebt over $100 million.
Minnesota authorities are already asking affected parties to file claims and retain contracts, invoices and notices for possible refunds.
Minnesota Ruscoa company founded in 1955 to redevelop historic Twin Cities areas, has closed its doors without notice, This leaves hundreds of customers with unfinished projects and significant economic losses.
As reported CBS News Last month, the company announced on its website that it was suspending operations completely and thanked Minnesota “for its 70 years of support and trust.”
The crisis arises after a bankruptcy filing in a Delaware court under Chapter 7, which involves a liquidation of remaining assets. According to court documents, Rusco has an estimated net worth of $1 million to $10 million Liabilities that could be between 100 and 500 million.
The amount of debt leaves little chance for unsecured creditors – including many customers and subcontractors – receive their deposits back.
The background of this autumn is Renovo Home Partnersa Texas-based company that acquired Minnesota Rusco in 2022. Renovo is backed by private equity firms such as BlackRock TCP Capital. According to financial managers in a report by the Minnesota Star Tribune, Renovo had already been struggling with problems since 2024: BlackRock stated that it has placed the company on “Non-Accrual,” ie You have stopped recognizing interest income on your loana sign of serious financial stress.
Affected clients tell stressful stories. One example is Charley and Kathy Smith, who invested $10,000 to expand their shower and install handrails, a key project for Charley’s mobility. After the closure, not only was the work not completed, but the Smiths are unsure whether they will get their money back. Another customer – according to reports from FOX 9— claims to have paid nearly $48,000 for windows that were never installed.
Faced with this situation, Minnesota authorities began to act. Office of the Attorney General urged the injured parties to file complaints and retain all documents related to their contracts: Invoices, contracts, payment receipts and communication with the company.
Additionally, customers who have used credit cards are reminded that they may be able to dispute charges and request refunds provided they have the appropriate support in place.
An important resource for many is the Minnesota Department of Labor and Industry (DLI) Contractor Recovery Fund. This fund can compensate for losses caused by contractors’ non-compliancealthough there are limits: the cap is $550,000 per licensed business. To access the fund, those affected must initiate a civil case against Rusco or reach a settlement, making recovery even more difficult for many people.
Aside from that, Rusco’s bankruptcy has not gone unnoticed by the recovery community. TWS Remodeling, another local company, responded quickly and offered concrete assistance by hiring several former Rusco employees and offering to complete abandoned work at a significant discount. TWS owner Tyler Ganz expressed that it is not just a business but a community responsibility: “These are families, they are our neighbors,” he said.
The closure of Minnesota Rusco has also sparked criticism of the private equity model in the home improvement sector. Analysts point out that buying heavily indebted local companies leaves customers vulnerable if profitability declines.
In this case, the leveraged financing strategy may have initially spurred growth, but it also accelerated the collapse as the market cooled and costs rose.
The local community now faces a complex scenario: customers and contractors work to rebuild interrupted projects, file legal claims or gain access to the sovereign wealth fund, while former Rusco employees look for new job opportunities. At the same time, state authorities are monitoring the bankruptcy process and warning that the restructuring fund does not guarantee a full refund of advance payments.
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