AG: Customers shortchanged by Minnesota Rusco’s sudden closure might not see money again

The Minnesota Attorney General’s Office says it is keeping an eye on Minnesota Rusco’s bankruptcy proceedings after the home renovation company closed abruptly last month, leaving customers with unfinished projects.

Minnesota Rusco — perhaps best known for its “since 1955” TV jingle — ceased operations on Oct. 29 after 70 years and filed for bankruptcy on Nov. 3. The company had been purchased by private equity in 2022 and rolled into the parent company Renovo Home Partners, which shut down 16 other home improvement companies across the country.

Renovo Home Partners is owned by BlackRock TCP Capital Corp., an indirect subsidiary of BlackRock, the world’s largest asset manager.

Attorney General Keith Ellison said private equity firms like BlackRock often “roll up” local businesses in the same industry and shift the debt of the acquisition onto the companies’ books, putting them in a precarious financial position while private equity siphons all the businesses’ value.

Minnesota Rusco’s bankruptcy filing revealed the company had between $1-10 million in assets but was leveraged for more than $100 million in debt.

Now, Ellison’s office is cautioning that anyone who had put money down for home renovations is considered an “unsecured creditor” under federal bankruptcy law and there is no guarantee they will see that money again.

“Private equity firms should not be allowed to gamble with your hard-earned savings and then hide behind corporate structures to avoid accountability,” Ellison said in a statement. “I am outraged on behalf of the families across Minnesota who trusted this well-known, Minnesota company, only to have the rug pulled out from under them by private equity firms pulling strings behind the scenes. These firms’ relentless pursuit of short-term profit at the expense of Minnesota jobs, businesses, and families is deeply troubling and raises fundamental questions about how we treat consumers and regulate private equity.”

What you can do

The Attorney General’s Office says Minnesota Rusco customers can take several steps to increase their chances of getting their money back.

Preserving records of any contracts, invoices, photos or communications with Minnesota Rusco can help document any services that were promised but not delivered.

Anyone who paid for services through a line of credit may have a clear path to recouping their money. If using a credit card, customers should be able to dispute the charges by contacting their credit card company. Those who entered a financing agreement may be able to stop loan payments and get a refund on any prior payments through a federal regulation called the Holder Rule.

Ellison also recommended filing a formal complaint through his office or by looking into repayment through the Minnesota Department of Labor and Industry’s Contractor Recovery Fund.

In the meantime, the attorney general said it will monitor the bankruptcy case and is investigating Minnesota Rusco’s sudden closure.
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