Under the weight of new retail superstars like Walmart and Amazon, Sears was forced to take a path last month that no business – or individual – would plan on. The Houston Chronicle reports that Sears – once the world’s largest department store chain – “filed for Chapter 11 Bankruptcy in federal court in New York as it faced a $134 million debt payment.” This payment is only part of the $11.3 billion in debt that Sears seems to be sinking under.
Sears is filing for Chapter 11 Bankruptcy in an effort to survive– but what does this kind of bankruptcy mean for a company so large? Besides closing down 188 stores, Sears is using Chapter 11 Bankruptcy as a means to cancel its depts and remain open through the holiday season.
As the New York Times says, Sears “faces long odds in trying to revive its fortunes. It will need creditors to agree that it should be reorganized rather than liquidated, as other bankrupt retailers have been.”
But how exactly? The New York Times goes on to report that Sears has been negotiating with investors in hopes to be thrown a lifetime. In response, Wall Street investors have agreed to loan Sears $300 million.
Sears wants desperately to be different than, Toys “R” Us – another retailer who, as the New York Times reminds us, “tried to reorganize, but eventually shut down in June and laid off all of its employees when its lenders concluded that the business was no longer viable.
In contrast to Toys “R” Us, Sears has hope after gaining the belief of Wall Street investors, but only after successfully arguing that Sears has a future.
This is where bankruptcy experience and knowledge plays a critical role – in helping creditors see that there is hope. Sears understands the need for guidance from those with bankruptcy experience and announced that it has recently hired Alan Carr as an independent director. CNN Business explains that “Sears hopes Carr can be the salesman it needs to win over creditors. If not, he could guide Sears through a bankruptcy — he was previously a bankruptcy attorney at New York law firm Skadden Arps.”
Time will tell how and if Sears can emerge as a successful business and retain some of its foothold as an American icon. What these recent headlines don’t necessarily explain is that Sears is not alone in needing a second chance.
Studies show that cases of businesses filing for bankruptcy are increasing. ACA International states that 2017 yielded a “26 percent year-over-year increase in business filings.” USA Courts states that in 2017, there was a total of 767,721 nonbusiness bankruptcies.
If you’re turning to bankruptcy as a last resort, we’re here to help! As experienced bankruptcy lawyers and attorneys, we believe that in many cases, bankruptcy can provide a much-needed second chance at financial success. Whether you’re an individual or a business, we’re here to help you find the best path forward. We’ve been helping clients for 20 years, and can help you prove that your future is promising and that you have what it takes to get back on your feet. Let’s talk about how a successful bankruptcy might be right for you. Contact us online or give us a call at (973) 567 0954
Law Office of Stuart M. Nachbar, P.C.
354 Eisenhower Parkway,
PO Box 2205,
Livingston, NJ 07039
Tel: (973) 567 0954
Fax: (973) 629 1294