Coronavirus Pandemic Forces Companies to Consider Bankruptcy
The spread of coronavirus has been wreaking financial havoc on national and international businesses alike. Some industries, such as brick-and-mortar retail, were struggling before the pandemic. Filing bankruptcy will likely be the solution for many of these companies. Below are some of the companies that have already filed, or are still in consideration.
Have Filed Bankruptcy Protection
Many of the names on this list are familiar as several have stores in Las Vegas and throughout Nevada. Even some of the most common named businesses are either in the process of or are strongly considering filing for bankruptcy protection. Some of the companies will re-organize their debt in a Chapter 11 bankruptcy and come through this COVID-19 pandemic while others may have to do a Chapter 7 “Liquidation Bankruptcy”
–Pier 1 Imports: This furniture retailer specializes in pieces that make your home feel like an exotic destination.
–True Religion: These jeans were very popular around the new millennium. However, demand for flashy jeans with overt logos has decreased over the years.
–The Schurman Retail Group: This company owns Papyrus, a stationary store often found at shopping malls.
–Modell’s Sporting Goods: This sporting goods retailer was founded in 1889.
–Nordstrom: This luxury retailer was already out of most Americans’ budgets before the COVID-19 outbreak.
–Best Buy: This company has survived a previous brush with bankruptcy.
–Lowe’s: Home Depot’s biggest competitor is facing financial struggles.
–JC Penney: This is another company that has already narrowly avoided financial ruin.
–AMC Theaters: The movie theater giant has been forced to close its over 1,000 locations due to coronavirus.
–Aeromexico: Airlines have been hit especially hard since travel is currently strongly discouraged.
Many of these businesses are American stalwarts. Some of the names on these lists may be surprising, while others aren’t. The financial relief provided by the CARES Act may be enough to save some businesses, but these provisions are geared towards small businesses. Larger industries will need government bailouts to survive this crisis.
They will likely need to choose between Chapter 7 and Chapter 11. Chapter 7 is also utilized by individuals, and it is a liquidation of most unsecured debts. If a business files Chapter 7, they will have to close. Filing a Chapter 11 allows a business to remain operating, but is expensive and complicated. Chapter 11 is typically reserved for medium-to-large sized businesses. If you are considering filing for bankruptcy in Nevada or if you have a business that is struggling and may need to re-organize your debt, please contact our Nevada bankruptcy lawyer Erik Severino. Erik offers free bankruptcy consults and has offices located near you in Las Vegas, Summerlin, and Henderson, Nevada. Call today- (702) 370-0155.