The Twilight Days of Old Barneys New York
January 07, 2020
The Barneys New York liquidation sales are moving to their final phase, with in-store sales expected to run until the end of the month or through early February, according to a representative for B. Riley Financial Inc., one of Barneys’ debtor-in-possession lenders after it filed for Chapter 11 protection in August. B. Riley also teamed with Authentic Brands Group in its $271.4 million deal to buy Barneys’ assets, which closed in November.
In theory, the bankruptcy court does not have to approve a company’s Chapter 11 plan to end its bankruptcy proceedings until those administrative creditors — attorneys and other professionals, goods vendors, companies that provided courier services, media and ad services, for instance — are paid. The idea is that all these companies helped sustain various aspects of the retailer’s life during the bankruptcy and that without them the company would not have been able to operate or have anything to sell during the process.
But the reality often is that the shell of the bankrupt estate — especially after its assets have been sold off — may not have enough left to pay off its administrative debts. What follows then is a series of claims and negotiations with creditors to pay them off partially. In the Barneys case, many administrative creditors are expected to file their claims in January.
“They need to understand the universe of administrative expense claims, for the purposes of considering whether the bankruptcy plan can be confirmed,” said Patrick Collins, partner at Farrell Fritz P.C. in its bankruptcy and restructuring and commercial litigation practices. The firm represents clients in the Barneys case.
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