Corporate Bankruptcy News Updates
In 2018, we saw some shocking bankruptcies and they were mostly brick and mortar retail chains. Companies such as David’s Bridal, Mattress Firm, Brook Stone, and Nine West all filed. Read on to get an update on a few of the companies we reported on in 2018.
In October, we covered the history and events that led to the downfall of Sears (catch up here). A lot has happened since October. As we reported in the previous post, CEO Eddie Lampert stepped down but kept his post as Chairmen. Mr. Lampert is now using his hedge fund to take over the failing chain. The bankruptcy court agreed to allow Lampert to be the sole party in the $5.2 billion dollar bid. Creditors are livid and claim that they would get more if the court allowed liquidation of assets to take place. Lampert plans to keep Sear’s 45,000 employees in their positions.
Everyone with television has heard of the California wildfires that took place in 2018. Well, an investigation determined that PG&E, California’s largest utility company, was to blame. In our previous article, we explained the faults of the utility company, California law, and plans to file for bankruptcy in anticipation of an earth-shattering lawsuit. On January 29th, 2019, PG&E filed for chapter 11 bankruptcy in anticipation of a lawsuit and potential liabilities in excess of $30 billion. On their website, they outline the changes they are making which include:
- Enhanced safety inspections
- Intense vegetation removal and infrastructure enhancements
- Equipment replacement
PG&E fully expects to be able to restructure and make it out of chapter 11 bankruptcy while “keeping the lights on” for its customers.
On October 20th, 2018, we reported that Mattress Firm was filing for bankruptcy under chapter 11. Just over one month later, the court agreed to allow the company to exit bankruptcy. After filing, Mattress Firm closed about 700 stores. The newly emerged company does not plan on slowing down. According to the CEO, bankruptcy “significantly improved financial and operating position [and] will enable us to strategically expand our business in new as well as existing markets, while continuing to focus on enhancing our omnichannel capabilities and product offerings.”
Bankruptcy can be an essential business tool. It often does not mean the business even has to close its doors. Chapter 11 allows businesses to restructure debt and stay open. If your business is struggling and you need help, contact Elias Dsouza at Dsouza and Strachan Lawgroup Group. Elias has been guiding businesses through difficult financial situations for over 15 years.