Mercer Rug Cleansing files for Chapter 11 bankruptcy

By: Carol Hazard | Times-Dispatch
Published: April 27, 2011

Mercer Rug Cleansing Inc. filed for bankruptcy reorganization Tuesday in U.S. Bankruptcy Court in Richmond.

Despite the Chapter 11 filing, operations will continue as usual for one of Richmond's primo rug cleaning businesses, the company attorney said, as it has for the past 75 years.

Mary Rutherfoord M. Ferguson is the president and sole stockholder for Mercer Rug and George-Marshall Corp., a real estate company that also filed for bankruptcy protection. She is the daughter of the late George R. Mercer Sr., who founded Mercer Rug Cleansing and the former Mercer Rug and Carpet Sales Inc.

Her husband, Allen Mead Ferguson, is the secretary and treasurer for both companies. He was chairman and CEO of Craigie Inc., an investment banking firm in Richmond that was acquired by BB&T in 1997.

The Fergusons filed for personal Chapter 11 bankruptcy protection March 30. The couple listed assets of $1 million to $10 million and liabilities of the same amount. The top 20 unsecured creditors are owed a total of $3.8 million, including $353,000 owed to eight prominent people in the Richmond area.

"The financial affairs, bank debt and collateral pledges of these companies are intertwined with the Fergusons personally," said David K. Spiro with the Richmond-based law firm of Hirschler Fleischer, counsel for the companies.

A motion will be filed shortly with the bankruptcy court requesting a consolidation of the three pending cases - Ferguson, Mercer and George-Marshall, he said.

"These additional filings were necessary to protect the assets of all the entities and allow for a restructuring and were not a reflection on the performance of Mercer Rug Cleansing," Spiro said.

"It will be business as usual for Mercer Rug Cleansing and these filings will have no effect on Mercer's day-to-day business, its employees or its many loyal customers."

Mercer Rug Cleansing is the operating entity. George-Marshall owns the Mercer Rug Cleansing real estate at 3116 W. Moore St., where it has been since April 1936, as well as the Victory Rug Cleansing property at 407 S. Cherry St. and 811 Albemarle St.

The filings for the rug-cleaning business and the real estate business each listed assets of $1 million to $10 million and liabilities of the same amount.

The largest creditor of the rug business is Tappahannock-based Eastern Virginia Bank, which is owed $1.5 million - the same creditor and the same amount as noted in the Ferguson's personal bankruptcy filing.

The largest creditor on the properties is Richmond-based Union First Market Bank, which is owed $799,251.

Victory Rug Cleansing is a separate corporation and has not filed bankruptcy.

A foreclosure sale for the Victory Rug Cleansing property by Union First Market Bank was scheduled for today but was postponed because of Tuesday's filings.

chazard@timesdispatch.com (804) 775-8023