Ellison Urges Quick Action After Minnesota Rusco Collapse Leaves Customers Out Thousands

(KNSI) – Attorney General Keith Ellison is informing Minnesotans left in the lurch by the abrupt closure of Rusco last month about some options to get their money back.

The home renovation company had been in business for 70 years, before being shuttered on October 29th, leaving hundreds of people who signed contracts and paid sizeable deposits in the cold.

Although Minnesota Rusco was locally owned for most of its existence, it was sold in 2022 to Texas-based Home Renew Buyer, Inc., doing business as Renovo Home Partners. In late October, Renovo went belly up , shuttering 16 affiliated subsidiaries, including Minnesota Rusco, which operated in at least nine states.

Renovo Home Partners is owned by BlackRock TCP Capital Corp., which is connected to BlackRock, the world’s largest investment firm based in New York. News outlets have reported that Minnesota Rusco’s closure follows a pattern common among private equity firms called a roll-up strategy.

The AG’s office says it works by having a private equity firm buy multiple local companies in the same industry and borrow heavily to pay for them. This debt burden falls on businesses, not on the private equity firm. The firm takes most of the profits while businesses bear all the risk, leaving them financially unstable.

Under this strategy, when a company goes bankrupt, federal law says secured creditors, banks and lenders, get paid back first. Customers who made deposits are considered unsecured creditors. They’re last in line and typically recover little to nothing of their money.

On November 3rd, Minnesota Rusco filed for Chapter 7 bankruptcy.

The AG’s office says anyone who lost money must act quickly. First, gather all contracts, receipts, and communications as proof of payment. If paid by credit card, contact the card company immediately to request a chargeback for undelivered services.

If financing was arranged through Minnesota Rusco, people may be protected by the federal Holder Rule, which can allow loan payments to be stopped and possibly get refunds when services aren’t delivered. Look for specific language about this in your financing agreement, but be careful, stopping payments without proper guidance could hurt a person’s credit score.

Customers can also file a complaint with the Minnesota Attorney General’s Office online or by calling 651-296-3353.

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