American Shingle Took money didnt replace roof. Little Rock, Arkansas

On June 3rd signed my insurance check of 2704.31 over to American Shingle to replace my roof shingles. They scheduled an install date of August 9th. I called a week before to make sure that they would arrive on August 9th to do the work, I even called the Thursday before and their customer support stated they would arrive August 9th to do the work. August 9th came and went and American Shingle did not arrive to replace shingles, I called customer support and they stated the work had been rescheduled for October 5th. I had asked why and customer support wouldnt say they stated they would return my call but didnt, later in the week I received a letter from them stating it had been rescheduled do to "unforeseen circumstances". On August 20th I received another letter stating they are being forced to close their doors do to financial hardship and that any money collected will be used to refund their creditors which is "inclusive" of the homeowners whose roofs have not been installed and in the future homeowners will receive additional information regarding the status of their refund. So basically American Shingle took and cashed insurance checks from homeowners and spent the money. Now they are paying their creditors with the money taken from customers, how can this be legal?