When a retail chain closes all its locations with no notice, that’s not usually a good sign for the future of the brand.
Typically, even a struggling brand gives customers and workers some notice that a shutdown is coming. That’s practical on multiple levels.
First, some states require warning employees before laying them off. In addition, most retailers that close need an opportunity to sell off inventory to maximize returns for creditors.
When Badcock Furniture filed for Chapter 11 bankruptcy, for example, employees found out on the same day the company announced going-out-of-business sales at all its locations. My wife and I visited one of their stores that day trying to buy a couch, and we spoke with a store manager who was notably upset and had no idea how much longer he would be employed.
That experience highlighted how much transparency matters during a retail collapse, a contrast that became clear when Circle Furniture shut down.
Circle Furniture, however, did things differently. Its employees received word about store closures via a company-wide email on Dec. 19 and got another email on Dec. 23 revealing that they are being laid off, according to a report from The Boston Globe.
TheStreet reported on the closing in December.
At the time, the chain had not filed for Chapter 11 bankruptcy. It has now done that, according to documents filed on Jan. 30 on PacerMonitor.
Circle Furniture files Chapter 7 bankruptcy
The chain officially filing for Chapter 7 bankruptcy may give a path to recovering deposits or having undelivered, but paid-for, furniture delivered.
The company has not shared any information with its customers about the fate of their orders.
Circle Furniture business has more than $13.7 million in liabilities but reports just $2.2 million in assets, according to the court filings.
The document also appears to contain a list of hundreds of customers who posted deposits for orders.
Summaries of the business’ bank accounts indicate only “minimal” balances.
In the wake of the closures, Boston’s NewsCenter 5 tried repeatedly but failed to make contact with the owner, Robert Richard. The bankruptcy filing indicates that Richard and Circle Furniture have retained Madoff & Khoury LLP for the Chapter 7 bankruptcy process.
More Bankruptcy:
- Key auto parts and services company files Chapter 11 bankruptcy
- Key travel brand files for Chapter 11 bankruptcy
- Self-driving-car company files for Chapter 11 bankruptcy protection
- 35-year-old consumer company files Chapter 11 bankruptcy
The company shared a statement with the news channel after it officially filed.
“After considering all options to try to keep the store operating and honoring customer deposits, Circle made the very difficult decision to close the business and file for bankruptcy protection, in order to avoid incurring further debt and losses. Circle management very much regrets any hardship this has caused to its customers and other creditors.”
Circle Furniture timeline
- Before Christmas 2025: Employees were informed via a company-wide email that Circle Furniture would be closing all store locations “until further notice,” indicating major operational changes ahead, according to Furniture Today.
- December 23, 2025: Employees received another email that confirmed layoffs effective Dec. 23, stating that the company “can no longer afford to continue operations,” reported Patch.
- Late December 2025 (around Dec. 23-24): All eight Circle Furniture stores across Massachusetts and New Hampshire were abruptly closed, with the official website stating “All Circle Furniture locations are CLOSED till further notice,” shared NBC Boston.
Circle Furniture bankruptcy notes
Although some early reports described the filing as Chapter 11, court documents show Circle Furniture filed under Chapter 7 for liquidation.
Circle Furniture Bankruptcy key points
- Circle Furniture filed for bankruptcy protection on January 30, 2026. The company’s legal filing was Chapter 7 (liquidation), not Chapter 11 (reorganization), according to Pacer Monitor.
- Filed in U.S. Bankruptcy Court for the District of Massachusetts.
- Listed 200-999 creditors.
- The retailer listed finished goods inventory (furniture) at roughly $3.5 million. All items are expected to be liquidated.
- The bankruptcy schedule includes customer deposits and supplier debts as unsecured claims.
Source: Pacer Monitor
Unsecured creditors in a Chapter 7 bankruptcy FAQ
1.Am I treated as a creditor if I paid a deposit and didn’t receive goods?
Yes. If you paid a deposit for goods or items that were never delivered before the company filed for bankruptcy, you generally become a creditor in the bankruptcy case. That means you must file a claim with the bankruptcy court for the amount owed to you, according to BDO USA, a large accounting firm.
2. Will I automatically get my deposit back?
No. You are not guaranteed a refund. In most bankruptcies, all the company’s assets are frozen and distributed to creditors through the bankruptcy process. If there isn’t enough money or assets left after higher-priority creditors are paid, you may get little or nothing back, added BDO.
3.What priority do customer deposits have in bankruptcy?
Under U.S. bankruptcy law, certain consumer deposit claims may receive priority status up to a statutory limit (for example, up to about $2,600 under Bankruptcy Code Section 507(a)(7), though this can vary with updates to the law), according to Cornell Law School’s Legal Institute.
Anything above that amount is usually treated as a general unsecured claim, which is paid only after secured creditors and administrative costs are satisfied, Cornell added.
4.Does paying by credit card help?
Yes. Paying with a credit card provides extra protections. Under the Fair Credit Billing Act, you can dispute charges for goods not received with your card issuer and potentially have the charge reversed (“chargeback”), even if the seller has closed or gone bankrupt. Paying by check or cash does not offer this protection, added BDO.
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