By Erick Johnson, Chicago Crusader
The washers and dryers are all quiet at Laundryworld in Woodlawn. A padlock hangs on an old iron latticework gate; a handwritten “laundry is closed” sign is taped on the glass front door.
For 50 years, Laundryworld’s washing machines and dryers hummed, pumping out clean clothes for thousands of residents in the neighborhood. But on Wednesday, Sept. 27, the facility spun its last load. A federal bankruptcy judge forced Laundryworld’s owner to liquidate a business that he built and owned since the days when Woodlawn was integrating as a community.
Bankrupt and with no one to turn to, Laundryworld owner Lloyd Hughes has been hung out to dry. All it took was a $354 repair bill to wash decades of hard work down the drain. In addition, Hughes may lose his house and his parents’ house from the foreclosure.
Hughes says it was a mistake that allowed Inland Bank to gain control of Laundryworld after U.S. Bankruptcy Court Judge Benjamin Goldgar made a stunning ruling that left Hughes and his supporters in shock, disbelief and saddened.
His story is the latest casualty in Woodlawn where several businesses on South King Drive have closed over the years as urban renewal continues to set in before the Obama Presidential Center and Library is built.
In the past three years, both Walgreens and McDonalds have closed their doors after decades of service. The latest casualty, Hughes’ laundry business, may be the most devastating closure of them all—one that leaves residents in the Parkway Gardens complex without a convenient and well-equipped facility.
In 1967, Hughes founded Laundryworld, 6331 S. King Drive, when he was just 20 years old. The Parkway Gardens Homes was only 12 years old, and Chicago’s Black population boom was reaching its peak at the end of the Great Migration.
With a small loan and help from his parents, Hughes bought an old brick auto-repair garage that operated at the King Drive address and several washing machines. He called it Woodlawn Coin-Op Cleaners and Laundry. With no experience with laundry machines, Hughes taught himself how to repair the equipment and how to run a professional operation. Today, Hughes’ business is called Laundryworld, an operation that the owner has run with pride.
As more laundromats popped up in Woodlawn and other South Side neighborhoods, loyal patrons kept Hughes’ operation spinning. To stay competitive, in 2010, Hughes took out a $625,000 Small Business Administration loan through First Choice Bank in Geneva, IL. He used the loan to pay for major renovations at Laundryworld, purchasing 155 new state-of-the art washers and dryers.
Like many banks during the height of the Great Recession, First Choice went under. Inland Bank bought its loans and deposits in 2011 from the FDIC. Hughes’ debt was among those acquired by Inland after the purchase.
Hughes said he began struggling to make his monthly payments as his business slumped. He sought to renegotiate the loan terms with Inland Bank. At first, Hughes said the bank expressed interest in renegotiation, but the situation dragged on and Hughes began to fall behind on his monthly payments.
In 2015, Hughes filed a federal lawsuit against Inland accusing them of intentionally causing delays in modifying the terms of his loan. He believes it was the bank’s way of racially discriminating against him. Last month, the case was dismissed.
In 2016, Hughes filed for Chapter 11 bankruptcy seeking to negotiate better loan terms under reorganization. During this time, Hughes said the motor on one of the washers burned out. A repairman came out and fixed it and he paid the $354 repair bill without prior authorization from the court.
As a result, Inland’s lawyers persuaded Goldgar to switch Hughes’ case to Chapter 7 bankruptcy. The move allows a bank trustee to sell off the company’s assets and loan collateral. Not only would that be Hughes’ Laundryworld business, but also his home in West Chesterfield and another home that belonged to his late parents.
Goldgar ordered Hughes’ business placed in Chapter 7 bankruptcy for liquidation.
Shocked, Hughes reportedly asked the judge if he could speak. He said, “Your order literally means I’m out of business.”
Goldgar responded, “I think that’s been true for some time. I’ve got a bank that hasn’t been paid.”
Hughes’ lawyer, John Redfield, reportedly said Inland intends on collecting the $480,000 debt that his client owes on his SBA loan.
Laundryworld is closed now, its doors protected by locked-up, iron lattice fencing. The washers and dryers are still there and Hughes’ small office.
On Wednesday, Oct. 4, three young men from Parkway Gardens were seen on their way back home, hauling loads of dirty laundry in carts. They had taken the laundry to Laundryworld, but discovered it was closed. They said they were not aware of the circumstances surrounding the closed business.
“I’m pissed,” said one would-be customer. “Where am I going to wash my clothes?”
As an alternative, residents can take their laundry to Neighborhood Laundro-Mat at the corner of 67th and St. Lawrence. The facility is just over a mile north of Laundryworld, and for many residents, that may be too far to walk with loads of laundry.
The Parkway Gardens complex does have a laundry facility, but sources say it’s not as large and efficient as Laundryworld.
Hughes spoke to the Chicago Crusader on Sept. 29. Still in shock from the ruling, he said Laundryworld is history.
Now 70, Hughes said he had hoped to run Laundryworld for 20 more years. Presently, he is afraid of losing his two homes now that Inland Bank succeeded in court. Hughes said he spent $175,000 in legal expenses and owes three law firms $400,000.
Broke and without his business, it’s a sad ending to a success story for a Black entrepreneur who started with little and is left with nothing after 50 years in business.
“Everything is gone, just like that. I made an honest mistake,” Hughes said. “Inland pounced on it because they knew what they wanted. Who would have thought that I’d be shut down because of a small mistake?”
