2018 represented another busy year for Chapter 11 retail bankruptcy filings, with Sears dominating the headlines in the last quarter of 2018 and Toys “R” Us closing all of its US stores before the third quarter.
As the New Year unfolds, there could be companies in trouble in 2019. The following are 10 retailers to watch for a possible Chapter 11 filing this year:
Continue Reading 10 Retailers to Watch for a Bankruptcy Filing in 2019
David’s Bridal, Inc., the country’s largest wedding dress retailer, filed for Chapter 11 bankruptcy protection in the District of Delaware this morning, under case Number 18-12635 (LSS). According to reports from USA Today, the company plans to operate its 300 stores and stay in business.
Unlike its competitor, Alfred Angelo, which filed for bankruptcy protection in 2017 and left brides and grooms standing at the altar without their garb, David’s Bridal has assured customers that all orders will arrive on time and that any bridal appointments will not be impacted.
Continue Reading David’s Bridal Says “I Do” to Chapter 11 Bankruptcy Filing
Reuters reports that Houston-based Mattress Firm, Inc. the largest U.S. mattress retailer with 3,000 stores is preparing to file for Chapter 11 bankruptcy protection by the end of this week. Additionally, Reuters cites that its South African parent company, Steinhoff International Holdings NV, is encountering debt challenges, as well.
It is expected that the filing would be a shedding of unprofitable stores to attempt to secure the company, much like Payless did in its Chapter 11 filing. A filing at the end of this week would likely mean that Mattress Firm does not pay its October rents on time, as it moves to reject a number of leases.
If you have a Mattress Firm lease, it is important to know your rights now. Stark & Stark’s Shopping Center & Retail Development Group can help.
Continue Reading Mattress Firm Preparing to File for Chapter 11 Bankruptcy This Week
In the last few days, hundreds of bankruptcy complaints against trade creditors were filed by bankrupt Chapter 11 debtor VRG Liquidating, LLC (formerly EMS) (docket 16-10971). The crux of the complaints that many businesses will be shortly served concern “preferences,” requesting the return of money received from bankrupt debtors 90 days prior to the bankruptcy filing of April 18, 2016 for goods or services sold. However, before you go writing a check to return hard earned money, you should know that you may have defenses that can be asserted.
A preference is a payment received from a debtor, made within 90 days of the bankruptcy filing. Bankruptcy Code section 547(b) allows a bankruptcy trustee or debtor-in-possession (here, VRG) to avoid these payments, if the transfers were to or for the benefit of a creditor on account of an antecedent debt, while the debtor was insolvent. When Congress enacted the Bankruptcy Code, the policy behind preferences was to level the playing field for all creditors by not allowing a creditor to receive more than it would have within the debtor’s bankruptcy case.
Continue Reading EMS Bankruptcy Preference Complaints: Trade Creditors Protect Yourselves
Within the last week, two (2) retailers filed for Chapter 11 bankruptcy protection, Heritage Home Group LLC and Real Mex Restaurants. Heritage originally emerged after a 2013 bankruptcy of the Thomasville, Broyhill, and Lane furniture brands, and Rex Mex operates Chevys Fresh Mex, El Torito, and other full-service restaurant brands. Both filed in the United States Bankruptcy Court District of Delaware, cases 18-11736 and 18-11795 respectively.
Additionally, Reuters and CNBC are reporting that Mattress Firm Inc., the largest U.S. mattress retailer, is also contemplating Chapter 11 filing.
This week, Massachusetts-based pizza chain Bertucci’s filed for Chapter 11 bankruptcy protection in the Delaware (seeking joint administration under case No. 18-10894). Bertucci’s operates 59 stores, 29 of which it plans to reject.
According to The Wall Street Journal, an affiliate of Chicago-based investment firm Right Lane Capital LLC has agreed to purchase the chain’s assets, but that bid will be tested at a bankruptcy-court supervised auction.
Continue Reading Pizza Chain Bertucci’s Files for Chapter 11 Protection
Today, Claire’s Stores, Inc., along with seven affiliates and subsidiaries filed for Chapter 11 bankruptcy protection in the Delaware (Case No. 18-10584). Claire’s is a well-known specialty retailer of teen and young women jewelry, accessories, and beauty products, as well as ear piercings at local malls, based in Cook County, Illinois.
Back in January 2018, I included them on my list of Retailers to Watch for a Bankruptcy Filing in 2018.
According to Court pleadings, the company negotiated a restructuring support agreement and plan term sheet with an ad hoc group of its first lien noteholders and is seeking approval of up to $135 million in DIP financing.
The company lists 92 stores to close, on top of the 100 that it closed last year. Still, Claire’s indicates that it intends to operate the remaining 1,600 Claire’s and Icing brand stores through a restructuring.
Continue Reading Teen Fashion Retailer Claire’s Files for Chapter 11 Protection
*Updated February 6, 2018*
Carson Pirie Scott II, Inc., aka Bon-Ton Stores (“Bon-Ton”), which has dual headquarters in Milwaukee, WI and York, PA, filed on Super Bowl Sunday for Chapter 11 bankruptcy protection in the US Bankruptcy Court, District of Delaware, Docket # 18-10248 (MFW).
The regional department store chain operates 260 stores in 24 states, largely in the Northeast and Midwest. Bon-Ton operates stores under its own name as well as: the Boston Store, Carson’s, Younkers, Herberger’s, and Elder-Beerman. Rumblings of a possible filing circulated in early December as the chain watched its holiday sales fall.
Bon-Ton reports that it has a commitment of $725 million for debtor-in-possession (“DIP”) financing to operate during the restructuring process. The company’s business plan, which was filed earlier this week with the SEC, reports it’s main priority is the overhaul of its private-label products, as it plays catch-up with Kohl’s, Macy’s, and J.C. Penney.
2017 represented one of the busiest years for Chapter 11 retail bankruptcy filings. Many companies that filed have successfully emerged, like Payless. Yet, some are still questionable as to their future, such as Toys “R” Us, which is expected to begin selling a number of their leases and company owned real estate this quarter.
As the New Year begins, here are 10 retailers to watch for a possible Chapter 11 bankruptcy filing this year:
Continue Reading 10 Retailers to Watch for a Bankruptcy Filing in 2018
On December 11, 2017, Charming Charlie Holdings, Inc. (“Charming Charlie”), the Houston–based fashion jewelry and accessories chain filed a Chapter 11 Bankruptcy Case in the United Bankruptcy Court for the District of Delaware. Charming Charlie has closed about 100 of its 360 stores. Further, its New York City flagship location on Fifth Avenue will soon close.
The company is working with turnaround advisor AlixPartners LLP, in addition to other restructuring advisors and attorneys.
More than 15 retailers, including Toys “R” Us Inc, the largest toy seller in the U.S., have filed for bankruptcy this year.
Continue Reading Charming Charlie’s the Next Retail Filing in 2017?