BlueHippo will be shut down under Chapter 7 bankruptcy

Wednesday, BlueHippo Funding, that's been dogged by consumer complaints for years, filed for Chapter 7 bankruptcy liquidation status, that reflects a move signaling the likelihood that the company will soon be closed.

 Last month when BlueHippo‘s payment processor's bank unexpectedly blocked its funds, leaving the company unable to pay creditors, it had sought bankruptcy reorganization protection. BlueHippo petitioned a Delaware bankruptcy court judge to allow the funds to be released to the company, but its request was denied on December, 2, according to court records.

 According to the lawsuit, BlueHippo "will not be able to satisfy administrative expenses that will continue to accrue if these cases are maintained in Chapter 11[reorganization]. Woodlawn-based e -sales company has a bankruptcy court hearing on its Chapter 7 motion December, 23. 

 Under Chapter 7, a company has to cease operations and works to sell off its assets to satisfy creditors. A former employee, said that BlueHippo's owner Joseph K. Rensin laid off an unspecified number of employees on Friday and retained a small team of workers this week to slowly shut down the company.

 Over the recent years, the Federal Trade Commission and regulators in several states, have sued the company of deceptive practices, of overcharging for computers and electronics, and of failing to deliver products sold to typically low-income, poor-credit customers. 
 Thus, the Maryland attorney general's office settled a case with BlueHippo two years ago, and the company had to pay $3.5 million in restitution to customers. As part of this case, BlueHippo could no longer operate dealing with customers in the state, though it operated out of offices in Woodlawn.

 Last year, Blue Hippo agreed to pay another $3.5 million in restitution after settling an inquiry by the Federal Trade Commission.