Business Bankruptcy Articles and Information

I tend to be a nostalgic person.  I recall stories in my childhood told by my parents and grandparents about going downtown to the big department stores to shop at Christmas.  Everyone’s stories always included a visit to the candy counter.  I am not old enough to remember any of the downtown establishments they reminisce about except I remember Sears.  I remember it because of one thing, the candy counter.  The downtown location closed when I was still in elementary school and moved to the new local mall that opened.  What a great place!  The mall was “the” place to…Read   More

Family Christian Stores has announced that it will be closing all 240 stores.  This company has been in business for 85 years.  The company claims that the reasons for closing all stores are due to “changing consumer behavior and declining sales”.  Family Christian Stores is a non-profit and one of the largest local providers of Christian products.  The company has not announced when the stores will be closed. With the growing trend of digital products, the physical demand for books have rapidly declined.  Students in schools are even using iPads instead of physical books to cover various school subjects.  Personally,…Read   More

Payless Inc. is reportedly discussing a restructuring plan with its lenders. The restructuring plan would involve closings about 1000 of its stores. Currently, Payless operates more than 4400 stores around the country. Shoe Seller May Be Forced to File Bankruptcy According to sources familiar with Payless’ financial situation, the shoe seller might be forced to file bankruptcy if it is not able to work out a restructuring plan with creditors. It recently hired a law firm, Kirkland & Ellis to examine its $600 million debt load and look at ways that debt can be managed. Much of this debt was…Read   More

Hyundai is one of Montgomery’s biggest employers where more than 3,000 team members are employed with high-paying jobs and full benefits. Additionally, more than 35 tier one suppliers are located in seventeen counties across Alabama.  Further there are 78 total suppliers located throughout North America to support the Hyundai plant. Altogether, these suppliers created 7,000 additional jobs by Alabama based suppliers according to Hyundai’s website. President Trump’s campaign made threats to trash the North American Free Trade Agreement or impose stiff import tariffs to keep more jobs at home. Mexico is attractive to the automotive industry due to low operating…Read   More

After serving the Shoals area for close to 15 ½ years, Best Buy has announced it will close its Florence, Alabama store located at 398 Cox Creek Parkway on February 25, 2017. Best Buy, Co. Inc. is an American multinational consumer electronics corporation headquartered in Richfield, Minnesota.  Best Buy, famous for its “Geek Squad”, was named “Company of the Year” by Forbes in 2004.  It was founded by Richard M. Schulze and Gary Smoliak in 1966 as an audio specialty store with the original name “Sound of Music”.  In 1983, Sound of Music was renamed Best Buy Company, Inc. and…Read   More

A discharge is one of the most important functions of bankruptcy.  It is what releases a debtor from personal responsibility for his debts and helps provide a debtor with a “fresh start.”  The Bankruptcy Code allows a debtor’s discharge to be denied in certain circumstances, and the Supreme Court will soon decide an issue concerning one of these circumstances. On March 1, 2016, the Supreme Court heard oral arguments in the case of Husky International Electronics, Inc. v. Ritz, No. 15-145.  The issue in this case is whether false statements are required to trigger the Bankruptcy Code’s bar to discharge…Read   More

Core Media Group, the company responsible for the hit show American Idol, has filed for Chapter 11 bankruptcy protection citing deterioration in its financial performance. This comes on the heels of the show concluding its 15th and final season. Core is also responsible for So You Think You Can Dance. Some may find it hard to believe that a company responsible for two shows with such a strong television presence could be struggling financially, but profits have decreased for some time. Loss of Earnings and Sponsors According to USA Today, earnings for Idol fell $15 million in 2014 and total…Read   More

Local Chapter 9 Bankruptcy Filings

Posted on January 19th, 2016 by Kathryn Davis

My last blog post gave a brief overview of a Chapter 9 bankruptcy.  In this post, I will discuss a couple of “local” Chapter 9 filings and some noteworthy issues that arose in those cases. Bankruptcy for Municipalities As I noted in my last post, a Chapter 9 bankruptcy is available to financially stressed municipalities.  In the over 60 years since Congress first provided a way for municipalities to file bankruptcy, less that 500 municipalities have actually filed petitions.  Interestingly, two of those more recent petitions have originated from Alabama.  The City of Prichard filed for Chapter 9 protection in…Read   More

Earlier this week, it was announced that weapons manufacturer Colt Defense would exit Chapter 11 bankruptcy as the court had approved their reorganization plan. After seeking bankruptcy relief in June of 2015, Colt was able to raise new capital through the restructuring process. They can now attempt to remain relevant in the continually burgeoning American gun market that set all time sales records last year. There are many other famous names who successfully sought bankruptcy relief in order to stay in business. American Airlines filed for bankruptcy protection in 2011 and was later able to merge with AMR and US…Read   More

This is a question that we hear often. A man or woman will call in with what they think is a simple question. He or she will share that they have been operating a business and want to know if they can bankrupt on just the business debt and keep their personal debt out of the bankruptcy. In this situation, as in many, the answer is not a simple one. The first step will be to determine what type business the individual has been operating and in what legal capacity. In many cases, the individual will have been acting as…Read   More