BlueHippo Files Chapter 11 After Bank Accounts Frozen

It appears that when the FTC filed a contempt charge against scamtastic consumer electronics purveyor Bluehippo, the company’s bank took notice and froze their accounts. Now Bluehippo has filed for Chapter 11 bankruptcy protection, claiming that they can’t repay their creditors, what with the frozen bank accounts and all. This will not end well.

If you’re not familiar with Bluehippo, they’re essentially a computer layaway service. Or what rent-to-own would be like if, after paying high weekly fees for a lengthy period, there were a chance that you might eventually receive an obsolete computer to use. Thousands of customers allegedly never received their computers.

According to the Baltimore Sun:

“First Region’s Bank explained in an e-mail that it was freezing BlueHippo’s accounts solely as a result of a recent press release issued by the FTC – a press release that is replete with factual inaccuracies,” BlueHippo said in a statement. The company said it believes the bank’s actions were unlawful and left BlueHippo unable to pay its creditors. BlueHippo added that it has demanded that its funds be immediately restored.

Shoe’s on the other foot now, eh? Incidentally, Bluehippo no longer does business at all in the state of Maryland.

BlueHippo files for bankruptcy [Baltimore Sun] (Thanks, Joe!)