It cannot really be debated that the Four Horsemen of the “retail apocalypse” have arrived and are comfortably hanging around the nation’s shopping districts. Dozens of retailers filed for bankruptcy in recent memory, including Bon-Ton, Claire’s, Gibson Brands, and Brookstone, with more on the bankruptcy watch list. With many recognized names liquidating through bankruptcy, perhaps no distressed industry has caused greater concerns for vendors, suppliers, landlords, and other operations-related creditors than retail.

Although not necessarily apparent at the outset of such cases,...

A majority of today’s large Chapter 11 cases are structured as quick Section 363 sales of all the debtor’s assets followed by confirmation of a plan of liquidation, dismissal of the case, or a conversion to a Chapter 7. The purchaser in the sale is often one of the debtor’s prepetition secured or undersecured lenders, which may also act as the debtor-in-possession (DIP) lender and purchase the debtor’s assets through a credit bid, with no cash consideration.

In these cases, general unsecured creditors have little chance of a meaningful recovery absent a viable and recoverable claim...

The U.S. retail industry is tattered and torn, and Chapter 11 continues to be an inevitable ending for many distressed retailers struggling in the post-Amazon world. Indeed, despite the recent uptick in the U.S. economy, retailer woes have continued unabated, with sales for many continuing to suffer despite wage improvements and the stock market’s upward movement.

Since the beginning of 2016, there have been more than 60 retail bankruptcies, making it the second most active sector in total bankruptcy filings during this stretch, behind only the oil and gas sector. Yet, studies show...

It should come as no surprise to turnaround professionals or even casual readers that the retail industry is in a state of transition. However, contrary to the popular refrain, this transition does not signal that brick-and-mortar retail is dead, nor is it in the midst of an apocalypse.

The retail industry is evolving to respond to changes in consumer expectations of brick-and-mortar stores within omnichannel platforms. Customers now demand that retailers merge digital and physical experience rather than merely offer products for purchase. The ability to buy products online and pick...

A troubled company often reflexively perceives a bankruptcy filing as the prototype solution to its financial distress. Bankruptcy is an important and powerful tool to address insolvency—providing for an automatic stay, the sale of assets free and clear, confirmation of a plan over the objection of creditors, and discharge of debts.

A bankruptcy, however, has several limitations, including significant time and expense. Bankruptcy also frequently results in a sale or liquidation, as opposed to reorganization, and may involve protracted litigation. These drawbacks often render...

In February 2017, Strack and Van Til Supermarkets (SVT) retained the authors’ firm to address liquidity challenges and performance issues. Little did anyone appreciate at the time the severity of the issues the grocery store chain faced or that this case would become such a complex and multifaceted bankruptcy.

With nearly $1 billion in annual revenue, SVT operated 36 large supermarkets in the Chicagoland and Northwest Indiana areas under the well-known Strack & Van Til, Ultra Foods, and Town & Country banners. Founded in 1930, SVT successfully operated as an independent...

Six out of every 10 businesses are experiencing the same or higher levels of losses to online fraud compared with a year ago, according to “The 2018 Global Fraud and Identity Report” from Experian. Fraud was cited as a growing concern by 72 percent of businesses that participated in the study. Bankrupt companies are also three times more likely to be cited for fraud by U.S. regulators, according to a study from Deloitte Financial Advisory Services LLP.  That study indicated companies that experience fraud are much more likely than those that do not to land in Bankruptcy Court.

Many...

In a typical Chapter 11 bankruptcy case, the initial terms of a debtor-in-possession (DIP) financing arrangement likely include a provision granting the DIP lender a lien on the bankruptcy avoidance actions and/or the proceeds of such actions, and one of the first things a committee of unsecured creditors does upon its appointment by the U.S. Trustee is to challenge such a provision. Usually, a negotiation ensues, and the DIP lender, which has obtained other liens and claims against the debtors in connection with the DIP financing, allows the avoidance actions and/or the proceeds thereof...

“It is a longstanding principle of American law ‘that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States.’”1


A number of cases involving avoidance actions have been brought against overseas defendants in recent years. Several legal doctrines apply in such circumstances, including the doctrines of international comity and extraterritoriality. This article focuses on extraterritoriality.2 Although the U.S. Supreme Court has articulated a seemingly simple...

Despite the strong stock market performance and the low interest rate environment, financial distress, as measured by the number of Chapter 11 bankruptcy filings, is gradually increasing in both general Chapter 11 and real estate. The exception to this “gradual” increase is in healthcare, which has seen filings spike to record-high numbers filings over the past two years, as documented in the Polsinelli/TrBk Distress Indices.

Some reasons for the increased distress in healthcare are obvious, such as those related to a new regulatory and economic environment created under “Obamacare...