Mercer Rug Cleansing sold at auction

Mercer Rug Cleansing will stay in the family, not the Mercer family of Richmond but the Hadeed family of Alexandria.

The 75-year-old, family-owned Richmond rug cleaning and repair company was sold at auction to Hadeed Carpet for $1.265 million by sealed bid Monday afternoon.

"We want to keep all the employees and grow the business," Joe Hadeed said after the auction.

He and his brother, Mike Hadeed, run a carpet cleaning and repair business started by their father in 1955. Their bid is contingent upon approval by the U.S. Bankruptcy Court, which ordered the sale of the business.

Mercer Rug, which employs 15 people, is part of the bankruptcy proceedings of Allen Mead Ferguson and his wife, Mary Rutherfoord Mercer Ferguson, a prominent Richmond couple known for their philanthropy.

The couple filed for Chapter 11 bankruptcy reorganization March 31 and converted the filing to a Chapter 7 liquidation June 28.

The Hadeeds' bid is for the business, the building and machinery at 3116 W. Moore St. and another property across the street.

A parcel in Oregon Hill, another piece of the Ferguson bankruptcy, sold separately Monday afternoon at a live auction for $600,000 to a developer.

Developer Guy Blundon, who lives in Somerset near Charlottesville, said he plans to use historic tax credits to renovate the building at 407 S. Cherry St. into apartments. The property is the location for Victory Rug Cleaning Co., an affiliate of Mercer Rug Cleansing.

No stranger to the Richmond market, Blundon partnered with Dominion Realty to develop Manchester Place, a 198-unit apartment building under construction on the south side of the James River in Manchester.

Blundon and Dominion Realty, a Raleigh, N.C.-based developer, bought the Manchester property at 901 McDonough St. this past summer. The Fergusons, through a real estate company, had a one-quarter interest in the property.

Both transactions took place Monday afternoon at the law offices of Hirschler Fleischer in Richmond.

About 50 people attended the live auction. Tranzon Fox was the auctioneer.

The properties are owned by the George-Marshall Corp., a real estate company that filed for bankruptcy protection after the Fergusons' personal filing.

Mary Rutherfoord Mercer Ferguson is the president and sole stockholder for George-Marshall and Mercer Rug.

The rug company, also in bankruptcy, was founded in 1936 by her father, the late George R. Mercer Sr.

Her husband, Allen Ferguson, is the former chairman and CEO of the investment banking firm Craigie Inc., now part of BB&T Corp. He serves as secretary and treasurer for George-Marshall and Mercer Rug.

Hadeed Carpet has a corner on the rug-cleaning business in Northern Virginia and the Washington market.

Brothers Joe and Mike bought the business from their father in 1990 and grew it from five employees to 175 employees. They recently bought a 69,000-square-foot plant in Springfield for the cleaning business.

Joe Hadeed said he plans to employ at least 60 people in Richmond by the end of 2012.

"Our mission was to sell the assets in a combination that would maximize the return to the creditors," said David K. Spiro with Hirschler Fleischer, counsel for the companies.

Spiro said he expects formal approval of the winning bids at a court hearing scheduled Thursday in U.S. Bankruptcy Court. Closings are expected within 45 days of that approval.

"We are really pleased with the buyer and the outcome," Spiro said. "The Hadeeds are proven and successful operators in Northern Virginia. They plan to retain all current employees and grow the business in central Virginia, benefiting the local economy."

Blundon, the buyer of the Oregon Hill property, also has a proven track record, Spiro said.

Joe Hadeed said their bid of $1.265 million was more than they wanted to pay. "However, we are a family business and the (Mercers' similar) roots were worth paying a little more."