Costs mount for Stanley Furniture deferred compensation plan

Company owes nearly $900K to former execs who had part of their pay deferred for retirement

HIGH POINT — The amount that Stanley Furniture owes to former executives under a deferred compensation plan continues to rise, according to court documents.

However, one source said its unlikely that the plaintiffs will ever see any more funds from Stanley given it’s uncertain future in the U.S. market.

According to court documents, the company now owes just over $890,000 in deferred compensation based on a filing with the U.S. District Court for the Western District of Virginia in Danville. This is up from the $687,000 the court said was owed in documents filed last fall.

According to the filing in mid-May, former Stanley division Stone & Leigh has paid in full all outstanding monthly payments under Stanley’s Supplemental Retirement Plan (SERP). However, the plaintiffs argue that Stone & Leigh also must pay additional funds based on actual compound interest on the delinquent payments, versus simple interest.

U.S. Magistrate Judge Robert S. Ballou also recommended that Stanley pay annual compounded interest on any delinquent payments.

In addition, the court found that with a few exceptions, Stanley has not made regular payments due the plaintiffs. For example, it noted that the company missed annual payments due to the plaintiffs on Jan. 2, 2019, but later made payments that March, and April that totaled 5/8 of the amount owed each former executives.

The court noted the company also failed to pay the 2020 annual payment due on Jan. 2, 2020 but paid $500 to each plaintiff that August. The court also said that the company did not make payments due Jan. 2, 2021, and also did not make annual payments due Jan. 2, 2022. Those amounts owed to the 17 former executives add up to a total of $890,116 as of May 17, 2022.

The court noted that Stone & Leigh paid all accrued and delinquent SERP payments with a simple six percent interest and that it is not currently indebted to the plaintiffs for deferred compensation payments. However, Ballou said that the plaintiffs are entitled to pre-judgement interest compounded annually. The document did not reveal the total amount of the compounded interest.

“Awarding compounded interest is appropriate to make the plaintiffs whole and to ensure that they receive the proper value of their damages suffered,” Ballou wrote, noting that Stone & Leigh only provided simple interest on the delinquent payments through Sept. 22, 2021.

However, it is unclear whether the plaintiffs will see anywhere near the total amount owned by Stanley. Stanley Furniture ceased its U.S. operations in March of last year, although then Stanley owner Walter Blocker said that the company was continuing to ship product to the U.S.

In May 2021, company lender Endurance Capital acquired various assets of Stanley for $2 million as part of a foreclosure proceeding. Earlier this year, Houston-based liquidation specialist RMP Partners acquired the Stanley name and IP.

Amir Mireskandari, CEO of RMP, was not available for immediate comment.

Efforts to reach an attorney representing Stanley Furniture also were unsuccessful.

However, one of the plaintiffs who spoke with Home News Now privately expressed doubt that the retirees would see any more money from Stanley given its uncertain future in the U.S. market either as an importer or a manufacturer of finished goods.

Thomas Russell

Home News Now Editor-in-Chief Thomas Russell has covered the furniture industry for 25 years at various daily and weekly consumer and trade publications. He can be reached at tom@homenewsnow.com and at 336-508-4616.

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