About 50 former employees of Len Druskin stores say they haven't been paid for work they did in the weeks before five locations suddenly closed.
The stores, operating under the names Len and Len Druskin, sold higher-end women's and men's designer clothing. Len Druskin started the business 40 years ago and it subsequently was taken over by his son Michael.
Employees received a text message on Feb. 10 from Michael Druskin saying they should not report to work due to a "company restructuring" in progress. Locations in Southdale, Mall of America, Rosedale, Ridgedale and City Center remained closed the next day.
The City Center location then reopened days later under a new name, Shop the Runway. It was filled with clothes and accessories from the other mall locations, which were packed up at night by a select number of employees.
Several former employees said they are owed about $1,000 to $1,700 each.
Marcus Lemonis, entrepreneur and host of CNBC's reality show called "The Partner," purchased the inventory and fixtures from all the Twin Cities stores in exchange for a bank note.
He said that he is not responsible for the employees' back pay. "I didn't buy his business," Lemonis said. "He [owner Michael Druskin] made some bad business decisions. He stiffed a lot of people."
The company had assets of less than $300,000 and debt on the bank note of $870,000 plus about $1.5 million owed to vendors and another lender, Lemonis said.
Druskin responded to a handful of employees in February about pay, but no one has been paid or heard from him in the past two weeks, said Alyssa Kelly, 23, the former assistant manager at Len in Rosedale. She has not received payment of about $1,500 for hours worked three weeks before the store closed.
"Michael has cut off all forms of communication and is claiming he is not the responsible party to pay us," she said. "He also will not give contact information to reach his lawyers."
In an e-mail to the Star Tribune, Druskin said, "We have no comment."
There has been no bankruptcy filing as of Friday, according to the U.S. Bankruptcy Court in Minneapolis, which also lists filings in St. Paul, Fergus Falls and Duluth.
Employees who have contacted the Minnesota Department of Labor and Industry for payment of back wages have not heard of any progress on their claims.
Kelly said she filed the paperwork more than two weeks ago. Former Len employee Ali Biwer of Shoreview contacted the agency twice but was told it couldn't help her without Druskin's personal contact information, which she did not know.
"They said I need a snail mail address for Michael to serve him, but I don't have one since his stores are closed," she said.
James Honerman, spokesman at the labor agency, said an address is typically required, but employees who may have been put off can call back and ask to speak with a labor investigator or a supervisor. In some cases of business closings, the state facilitates a resolution to wage claims, he said.
"We can't talk specifically about what we're doing or where we're at," Honerman said.
Ryan Joy Adams, the manager at Len in Rosedale, said she's out about $1,700. She contacted the labor agency shortly after the store closed.
"I was told that the wages have to be paid within 24 hours after we submit a formal claim, but that hasn't happened," she said. "Some of us are talking about contacting an attorney and some people are just talking about taking a loss," she said.
Rebekah Bailey, an employee rights lawyer at Nichols Kaster in Minneapolis, said unpaid wages without a bankruptcy is a unique situation. "Without taking class action or going to small claims court, there isn't a lot they can do but sit and wait after they file a claim. That's not good," she said.
John Ewoldt • 612-673-7633