August 31, 2020
A number of retailers that filed for Chapter 11 bankruptcy in the early months of the COVID-19 crisis are now at the finish line or close. To get here, retailers sought financing while facing the risks that come with months-long store closures, then reopened stores during the ongoing pandemic and struck deals with creditors, lenders, and in some cases, buyers.
Some retailers sought to maximize their odds of survival from the start by planning for as short a stay in bankruptcy court as possible. J.Crew and Neiman Marcus both entered their Chapter 11 proceedings in May with plans they had already negotiated with lenders to slash debt and emerge from bankruptcy with enough financing.
“That provides a lot of certainty, that allows them to make plans, to make projections, to get exit financing,” said Patrick Collins, bankruptcy and restructuring partner at Farrell Fritz P.C., speaking generally. “And it allows them to go through the process with a degree of confidence.”
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