Jack's Carpet files for bankruptcy

HOUSTON – A troubled Houston carpet company accused of stiffing dozens of customers has filed for bankruptcy.

According to court documents, Jack's Carpet owes $5,548,158.85  to customers, employees, the Internal Revenue Service and the state of Texas.

Elaine Welch was among the first of Jack's Carpet customers to contact KPRC Local 2.

"I'd wait, take off work, waiting for the carpet to come on the day they said and it just wouldn't come," Welch said.

Welch said she paid $2,700 for carpet but she never got it.

A former employee said he didn't get paid.

"Anybody that bounces a $14 check in a major corporation has big problems," Jerry Askew said.

In November, a spokesman said that the company wanted to make good on all contracts and obligations to customers.

According to court documents, Jack's Carpet estimates that, after any exempt property is excluded and administrative expenses are paid, there will not be any funds available for distribution to unsecured creditors.

What does that mean? It means there won't be any money left for customers who are waiting for refunds.

Despite filing for bankruptcy, there are still eight Jack's Carpet locations open. Manager Tim Woernley said those stores are open because an investor came in with an infusion of cash. He said any money the company makes gives secured creditors a better chance of being paid.

Woenley said any customers who paid Jack's Carpet before Nov. 1 are included in the bankruptcy. He said the company is trying to work with those customers to get them the carpet for which they paid.

A bankruptcy trustee will have to approve the arrangement, where the original owner of Jack's Carpet is still an owner of the new company even though he's liquidating the old company that has the same name.