Ever since the start of the pandemic, there have been an increasing number of businesses filing for Chapter 11 bankruptcy. However, many have been able to dig themselves out of bankruptcy to begin a new start.
Below are 5 companies who have filed for bankruptcy since the pandemic began.
- J. Crew
By the time summer approached in 2020, the amount of sales at J. Crew plummeted. Although their sales had been dropping for years, the pandemic only sped up the amount of decline. Because of that, the retailer filed for bankruptcy in May 2020 in the midst of figuring out what to do with its $2 billion it had in debt. Luckily, its major lender, Anchorage Capital Group agreed to be a majority owner to help alleviate the burden by $1.6 billion.
- Tailored Brands
As people began working from home, the need for suits and ties dwindled as many worked in pajamas. This caused a huge dip in the sales at Tailored Brands. This led to many locations closing and eventually causing the retailer to file for bankruptcy in August 2020 along with closing more than 450 stores. Since its filing, Tailored has been able to bounce back after utilizing its exit term loan, which gave the retailer $365 million to start over.
- Hertz Global Holdings
Somehow, Hertz managed to accumulate a debt amount close to $20 billion when 2020 came around. On top of that, when April came around, debt payments ceased and shortly after, the company was busy filing for bankruptcy in May. Despite that, investors took notice of a great opportunity and began reinvesting in the company. The reinvestments made the stock price increase once again and now continues to trade despite selling to investors for a chance to eliminate some massive debt.
- J.C. Penney Co.
Although J.C. Penny Co. declared a May 2020 bankruptcy, the bankruptcy court made a decision that the company be split. With the split deal, retail and distribution locations were sold to the lenders to have the debt forgiven of $1.5 billion. The remaining locations not sold are operated by Brookfield Property Partners and Simon Property Group. What many wonder now is the fact of what the empty space will be used for within the countless number of malls.
- GNC Holdings
When sales dipped on top of a decreased amount of cash inflow and debt payment to be made, GNC became forced to file a June 2020 bankruptcy. Although going bankrupt is not a good thing for a company, customers of GNC can still obtain their nutritional needs through them thanks to a sale conducted with their shareholder, Harbin Pharmaceutical which helped wipe away $770 million in debt. This allowed GNC to keep more than 1,400 stores operational.
Without a doubt the pandemic managed to affect major companies all across the markets. Luckily though, bankruptcy can be a real lifesaver when necessary. If you feel that your business may be facing bankruptcy, then you should be in contact with us today. We will sit down with you and discuss the options available to you.