Prof. Edward Adams Quoted in Star Tribune About Minnesota Rusco Shutting Down its Business

Professor Edward Adams, Howard E. Buhse Professor of Finance and Law, was quoted in the Minnesota Star Tribune about interior remodeler Minnesota Rusco suddenly shutting down its business this week. The business started in the Twin Cities in 1955 but was acquired by Dallas-based Renovo Home Partners in 2022. That parent company, now owned by BlackRock TCP Capital Corp., as well as at least three other remodeling subsidiaries, have all shut down. As of yesterday, no bankruptcy filings or layoff notices were publicly available. However, trade publication Qualified Remodeler reported a former Renovo manager expected a Chapter 7 bankruptcy, or “liquidation,” filing as soon as today. Prof. Adams said a Chapter 7 liquidation — rather than a Chapter 11 reorganization — signals the company likely sees no realistic path forward. He said, “Maybe they don’t even think there’s a way they can reorganize successfully and that they would get approval to reorganize, so they’re just skipping that step, which can be the prudent approach.” He added some entities file right away, while others might be gathering the money they need to file bankruptcy. It’s not unusual for a company to stop operations before filing, he said, though the timing can raise questions. Adams said customers who made down payments or have unfinished projects are considered unsecured creditors in bankruptcy, which often means they recover little, if anything.