Bankruptcy & Creditor's Rights

The unprecedented global pandemic has created a limbo for most retail tenants, and in some cases, left landlords without payment of rents. Further, some states have placed moratoriums on eviction actions, allowing tenant to stay and not pay. However, as states begin to open back up for business there appears to be light at the end of this tunnel. Still, expect a host of retailers to file for protection in July and August to eliminate stores and try to renegotiate rents.

Although we normally provide a list of 10 retailers to watch, we have increased the list to 20 given the current state of affairs. Following are the top 20 to retailers to watch for possible Chapter 11 filing(s) in the remaining year:


Continue Reading 20 Retailers to Watch for a Bankruptcy Filing in the Second Half of 2020

Hair cuttery bankruptcyGovernment orders directing the shut-down of non-essential retailers, as a result of COVID-19, have forced another retail chain into bankruptcy. Creative Hairdressers, Inc. (“Creative”), the parent of Hair Cuttery, filed for Chapter 11 relief yesterday in the bankruptcy court for the District of Maryland. According to its first day filings, Creative is one of the largest independent, family owned chain of hair salons that provides comprehensive services for men and women.

Continue Reading Hair Cuttery Enters Chapter 11 Bankruptcy – Seeks to Trim 49 Locations

In an ironic bankruptcy twist, the COVID-19 outbreak is thwarting Modell’s Sporting Goods’ ability to liquidate. Modell’s filed its bankruptcy case on March 11th and announced that it was closing all 134 of its stores. The chain was founded by Morris A. Modell in 1889, with a single store on Cortlandt Street in Manhattan. Modell’s followed in the footsteps of The Sports Authority, Gander Mountain, Eastern Mountain Sports, and other sporting goods retailers who have struggled mightily in recent years, and have landed in Chapter 11. Modell’s intention was to complete all liquidation sales by the end of April. The budgets filed with the bankruptcy court reveal no line item for lease expenses starting in May.

Continue Reading COVID-19 Forces Modell’s to “Mothball” Chapter 11 Efforts

Earth Fare, Inc., the 45-year old natural and organic grocery chain, filed for Chapter 11 bankruptcy on Tuesday in Delaware under docket number 20-10256. The Debtor operates more than 53 grocery stores throughout the Southeast, mid-Atlantic and Midwest.

The company is privately held and backed by private equity firms Oak Hill Capital Partners and Green Capital Partners. The Wall Street Journal and the Motley Fool report that the Debtor plans to close all stores.


Continue Reading Earth Fare Files for Liquidating Chapter 11 Bankruptcy

The lawsuits just keep coming… last week, Chapter 11 Debtor, Sears Holdings Corporation (“Sears”) continued to file hundreds of preference complaints to recover money from paid pre-petition creditors. The Debtor filed a mass of suits back in November 2019.

For most creditors, it makes no sense that they receive a complaint to return money for goods or services sold prior to October 15, 2018, when the company filed for bankruptcy protection. However, the Federal Bankruptcy Code allows a debtor to recover “preferences” in bankruptcy – 11 U.S.C. 547.

If you are a trade creditor who received a complaint, before you open the check book to Sears, know what defenses there are to this statutory claim.


Continue Reading Sears Continues to File Hundreds of Preference Suits Against Trade Creditors

Retail and restaurant Chapter 11 bankruptcy filings continued to grab headlines in 2019. According to CNBC, there were 23 retail bankruptcies in 2019, compared with 17 in 2018.

Six (6) retailers and one (1) restaurant chain that were on our “Watch List” in 2019 filed for Chapter 11 protection – Charming Charlie (Part 2), Forever 21, Payless (Part 2), Charlotte Russe, Things Remembered, Gymboree (Part 2), and Perkins & Marie Callender.

As the New Year unfolds, following are 10 retailers to watch for possible Chapter 11 filing(s) in the year ahead.


Continue Reading Retailers to Watch for a Bankruptcy Filing in 2020

This past week, Chapter 11 debtor Sears Holdings Corporation (“Sears”) filed hundreds of preference complaints to recover money from paid pre-petition creditors.

For most creditors, it must seem odd to be receiving a complaint to return money for goods or services sold prior to October 15, 2018 (the date when Sears filed for bankruptcy protection). However, the practice of recovering “preferences” in bankruptcy is allowed by federal statute – 11 U.S.C. 547. Before you go a writing a check to Sears, know what defenses you have against this statutory claim.


Continue Reading Sears Wants It’s Money Back… Debtor Filing Preference Complaints Against Trade Creditors

Destination Maternity Corporation filed for Chapter 11 bankruptcy on Monday in Delaware under docket number 19-12256.

The large maternity-wear retailer owns approximately 458 U.S. stores comprised of 362 Motherhood Maternity Stores, 26 Pea in the Pod stores, and 70 Destination Maternity stores.


Continue Reading Destination Maternity Files for Chapter 11 Bankruptcy