Major Home Improvement Company Files Chapter 11 Bankruptcy
November 14, 2025
Source: Yahoo Finance
When consumers learn a business is filing for bankruptcy protection, often the first image that comes to their minds is a company in financial distress.
Economic problems are not the only reason businesses need to file for bankruptcy, as the automatic stay provision of bankruptcy can help a company facing litigation to fend off legal consequences while a bankruptcy case proceeds.
A bankruptcy filing can also delay regulatory sanctions from government agencies until after a company resolves its insolvency issues.
As such, certain home improvement businesses have filed for bankruptcy this year, due to legal and regulatory issues, rather than financial distress.
Wellmade Floor Covering Filed Bankruptcy to Avoid Foreclosure
Hard surface flooring producer and distributor Wellmade Floor Covering International Inc. filed for Chapter 11 bankruptcy on Aug. 4, 2025, seeking a sale of its assets after a law enforcement raid on its Georgia manufacturing plant resulted in a debt default and a foreclosure sale.
Wellmade Floor Covering's petition filed in the U.S. Bankruptcy Court for the Northern District of Georgia canceled a scheduled Aug. 5 foreclosure sale of Wellmade’s assets.
Wellmade's secured creditor, AHF IC, was owed about $27 million in secured debt, consisting of a $20 million term loan and a $7 million revolving credit facility.
AHF IC had either scheduled or rescheduled foreclosure sales four times in July 2025, but the August bankruptcy filing implemented an automatic stay of all legal actions against the debtor while the bankruptcy case proceeded.
Wellmade’s legal problems began on March 26, 2025, when U.S. Immigration and Customs Enforcement, the FBI, and Georgia Bureau of Investigation executed a search warrant at the company’s Cartersville, Ga., manufacturing facility and arrested owner George Chen and his nephew Jiayi Chen on charges of alleged trafficking persons for labor servitude, according to a declaration by Chief Restructuring Officer David Baker.
The FBI and ICE investigated whether George Chen and Jiayi Chen engaged in alleged labor trafficking in connection with the recruitment of Chinese residents to come to the U.S. on L-1 visas to work for Wellmade.
No criminal charges were filed against Wellmade, and no criminal charges had been threatened, according to a declaration.
AHFIC Purchased Wellmade in Bankruptcy Sale
The bankruptcy court on Oct. 8 approved the sale of Wellmade to stalking-horse bidder AHF IC, and the transaction closed on Nov. 7.
Another home improvement company has filed for bankruptcy protection after a state agency dissolved two of the company's entities for failing to file annual reports.
