by And Buddy Mac debtors respond to US trustee’s motion to dismiss
CHANGZHOU, China – As expected, the shareholders of Changzhou Jiangxin Homefurnishings Co., the Chinese furniture producer better known in the United States by its export brand MotoMotion, unanimously approved two proposals that will reshape the company’s balance sheet and its factory floor.
A plan to redirect part of MotoMotion’s previously raised capital toward expanding smart-furniture production gained approval, as did amendments to the company’s articles of association, according to two filings made public in July 22. (Note: The filings were translated from Mandarin to English by Anthropic’s Claude.)
The vote clears the way for MotoMotion to spend approximately $45 million from its 2021 IPO on what it calls the “Smart Furniture Capacity Expansion Project,” a new production facility on roughly 400,000 square feet of industrial land in Changzhou’s Zhonglou Economic Development Zone. Shareholder support was overwhelming; more than 214 million shares, or 99.99% of votes cast, backed the measure. Even among small and midsized shareholders, whose votes are tabulated separately under Chinese securities rules as a check against being steamrolled by controlling interests, approval topped 99%.
The votes took place at the company’s Second 2026 Extraordinary General Meeting of Shareholders, held at the company’s headquarters building on Xinggang Road in Changzhou’s Zhonglou District. A cluster of shareholders cast their ballots in person while the majority voted via the Shenzhen Stock Exchange’s electronic voting system.
In total, 60 shareholders and proxies took part, representing just over 214 million shares, or about 75% of the company’s voting power. But, neither Chairwoman Li Xiaoqin nor Vice Chairman Xu Meijun attended; both said they were traveling on business. Under the company’s articles of association, when the chair and vice chair are both unavailable, a majority of the remaining directors may nominate a stand-in. That fell to director and board secretary Zhang Congying, who chaired the session in their place.
The second proposal was more structural, specifically a reduction in the company’s registered capital accompanied by corresponding revisions to its articles of association. This measure, too, drew support from more than 99.99% of shares voting, including a similarly lopsided majority among smaller shareholders.
Staying between the lines
Chinese securities regulations require that shareholder meetings of this kind be independently witnessed by outside counsel, so MotoMotion brought in the Beijing Global Law Office for the job. Two of the firm’s attorneys, Liu Yan and Gao Huan, sat in on the proceedings and helped oversee the vote count, while the firm’s broader legal opinion signed by managing partner Liu Jinrong concluded that the meeting’s notice, procedures, attendee credentials and voting results all complied with Chinese law and the exchange’s shareholder-meeting rules.
Beijing Global’s lawyers were explicit that their sign-off applies only to the mechanics of the meeting and not to the underlying merits of the capacity-expansion plan or the capital restructuring itself.
For a company whose recliners, massage chairs and other motion furniture are sold into the U.S. market under the MotoMotion name, the vote clears the way for management to formally commit previously earmarked funds to new manufacturing capacity aimed at the “smart” furniture for which the Chinese company is known. This category includes app-connected recliners and chairs with built-in massage, heating and positioning motors.
The capital structure changes tidy up the company’s registered books, a routine but legally necessary step whenever a listed Chinese company adjusts its capital base.
With both measures now approved and independently certified, the company’s board is expected to proceed with implementation, though neither the announcement nor the accompanying legal opinion specified a construction timeline or a dollar figure for the funds being reallocated.
The company has yet to comment publicly on its acquisition of Palliser Furniture in late May. MotoMotion participated at the Las Vegas furniture market this week, but absent was the company’s chairwoman, Xiaoqin Li, or Catherine Lee as she is known in the United States, according to multiple sources. Li/Lee owns an approximately 67% stake in MotoMotion in terms of outstanding shares.
In a down year for Chinese exports to the U.S., MotoMotion last year reached total sales of 3.4 billion yuan, or about $470 million, according to its public filings after converting to U.S. dollars. That 2025 total was up nearly a third over 2024’s $373 million and nearly 80% over 2023’s $280 million.
Buddy Mac counter-attack
Meanwhile, in a Dallas bankruptcy court, the debtors of Buddy Mac Holdings are asking a federal bankruptcy judge to reject a U.S. trustee’s motion that would dismiss its Chapter 11 case outright, arguing that the case should be converted to Chapter 7.
In a filing submitted July 20 in the U.S. Bankruptcy Court for the Northern District of Texas, attorneys for the debtors countered the trustee’s argument that the case should be dismissed for “cause” under bankruptcy law, based on missed post-petition monthly operating reports. The company’s lawyers said reports have been filed for every period through March 31, which covers the span during which nearly all of its assets were sold off.
Buddy Mac, which operated 46 rent-to-own furniture, electronics and appliance stores when it filed for bankruptcy in December, sold its entire store footprint earlier this year in a series of court-approved transactions to three buyers, including Phonix RBS, which held the company’s secured debt before the sales closed between February and March. Since then, the company says it has conducted no operations and generated no income.
What remains, according to the filing, is cash. The debtors argue dismissal would shortchange creditors and that converting the case to Chapter 7 would better serve the estate. A hearing on the trustee’s motion is scheduled for Aug. 6.
At the time of its bankruptcy filings, which were made in two separate filings, Buddy Mac Holdings was owned and operated by Ian Macdonald (90%) and Aaron Macdonald (10%). The company comprised 82 Buddy’s Home Furnishings locations across eight states in April last year, but when it filed for Chapter 11, that count was down to 47 locations in Texas, Arkansas, Florida, Illinois, Kansas, Missouri, New Mexico and Oklahoma.
Cited for the bankruptcy’s reasons in Macdonald’s declaration included the financial distress associated with Franchise Group, which filed its own Chapter 11 in November 2024. The FRG bankruptcy made getting credit from suppliers more difficult, according to the declaration, which caused inventory shortages and, therefore, a drag on sales.
Also cited were litigation with the franchisor, FRG’s Buddy’s Newco division, over its franchise agreement, in particular that agreement’s noncompete clause, as well as the acquisition of a $12.6 million loan by Phonix RBS.
Once FRG filed for bankruptcy, almost immediately, Buddy Mac “began experiencing serious difficulties in keeping its stores stocked with inventory, because suppliers associated the Company with the Buddy’s franchise and stopped extending credit,” MacDonald stated in his declaration supporting the bankruptcy filing. Buddy Mac had been thriving, generating over $73 million in revenue in 2022 and $74 million in 2023, according to the declaration, a track record that culminated in BMH being named Buddy’s franchisee of the year in 2022.
