On Sunday, February 3, 2019, at 6:52 p.m., retailer FullBeauty Brands Holdings Corp. and nine of its affiliates filed for bankruptcy in the Southern District of New York. In re FullBeauty Brands Holdings Corp. , Case No. 19-22185 (RDD) (Bankr. S.D.N.Y.). Less than 24 hours later, FullBeauty...
There has been an explosion of bankruptcy filings that were arguably precipitated by leveraged buyouts and private-equity-backed transactions. Two recent examples are Toys R Us and Sears, both of which were saddled with billions of dollars in debt as a result of leveraged buyouts by private equity...
The rise in popularity and convenience of online shopping ( i.e., the Amazon Effect) has triggered the bankruptcies of numerous retail consumer goods chains. Since 2015, there have been more than 50 major retail Chapter 11 filings. This trend is due to a number of factors, including (i) the...
As a condition precedent to confirming a Chapter 11 plan, Section 1129(a)(11) of the U.S. Bankruptcy Code requires a finding from the Bankruptcy Court that “confirmation of a plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any...
I'm honored to have been selected by TMA’s Executive Committee as chair of the Editorial Advisory Board. Together with TMA’s Leadership, we’re underway with some innovative changes to the JCR that should provide a lot of value to our membership and continue to position the magazine as the premier...
For much of the 20th century, Henri Bendel was one of the most innovative retailers in the world. It was the first retailer to spot Upper Fifth Avenue’s potential for affluent foot traffic, the first to offer an annual sale, the first to offer in-store makeovers, and the first to have its own...
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...
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...
To minimize their financing costs, retail companies commonly provide ABL lenders and term loan lenders with senior liens over separate silos of collateral. Typically, the ABL lenders have priority liens over the company’s borrowing base assets—most commonly current assets, such as receivables and...
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...