Adapting to Retail’s New Realities
The stories about moves made by an iconic toy seller attempting resurrection and a commercial real estate developer’s seeking to empower its retail tenants with advanced customer analytics have valuable lessons for struggling retailers seeking pathways out of distress. The recent history of Toys R...
The Impact of E-commerce on Retail Restructuring
Retail has been one of the most important industries in America for at least 100 years. In 2017, the industry generated $3.4 trillion in sales, and for 2020, the value expected of the industry is more than $3.9 trillion. Nevertheless, the industry has struggled. Just in 2019, more than 9,000 retail...
Managing Risks in Doing Business with Administratively Insolvent Retail Debtors
When a retailer files a Chapter 11 bankruptcy case, its suppliers face the critical decision of whether to continue shipping goods to the retail debtor post-petition. Cutting off all further shipments would limit any further loss but would also guarantee that the supplier had little to no chance of...
Navigating Liquidity in Retail Restructurings
Throughout a retail restructuring, from the prefiling period through the winddown of the proceedings, debtors and their professionals face unique challenges that arise from the nature of retail operations and the resulting direct impact on liquidity management. Although not an exhaustive recitation...
DIP Financing in Retail Bankruptcy Cases: Looking to Precedent to Reduce Litigation, Save More Retailers
With the surge in retailers filing for Chapter 11 over the last several years, precedents abound for the debtor-in-possession (DIP) packages put together to finance the bankruptcy cases of retail debtors. Certain patterns and common practices have begun to emerge. A review of large retail Chapter...
Improving the Odds of Success for Retail Bankruptcies
Last year saw over 9,300 retail store closures—more than any other year on record and a 60% increase over the roughly 5,800 closures in 2018. Whether one believes the industry is in the midst of the “retail apocalypse” or that what’s happening is merely a matter of survival of the fittest, it is a...
Retail In Crisis
These are unprecedented times. In a matter of days, the coronavirus pandemic virtually shut down American society, and with it, the wheels of industry came to a standstill. There is not one industry that has not been hit with the repercussions of this virus. In fact, “hit” may be an understatement...
Uncertainty Persists Over Postpetition Interest Vis-à-Vis Unimpaired Creditors
Unsecured creditors in bankruptcy typically are barred from receiving postpetition interest on their prepetition claims against a debtor. That much is certain. But several courts recently have faced more challenging questions, such as whether unsecured creditors that are purported to be unimpaired...
Expectations, Recession, Manufacturing, Distribution
With economists predicting an economic slowdown in 2020 and a recession perhaps as soon as 2021, how will valuations and EBITDA (earnings before interest, taxes, depreciation, and amortization) multiples fare? While it is difficult to get meaningful data specifically on distressed sale transactions...
Expect the Unexpected
As the trade war between United States and China persists and competition abroad continues to grow, U.S.-based manufacturers have faced diminished profits and uncertain financial futures. In fact, Deloitte projects the U.S. manufacturing sector’s GDP growth levels for 2019 trended downward,...