When toy retailer Toys 'R' Us filed its bankruptcy petition in September 2017, its executives said that the chain hoped to prosper during the holiday shopping season and that it would be able to reclaim its financial health in the New Year. The New Year has arrived, and the company has just revealed in a business bankruptcy court filing that it intends to close 182 stores, including a handful in and around Rockland County and New York City.
Due to its status as the country's financial center, New York is home to many corporate headquarters. The tiny state of Delaware likewise boasts an outsize number of corporate residents because its laws favor businesses that use the corporate form of organization. Both states also attract a disproportionate number of business bankruptcy filings -- and the lawyers who must appear in court to represent their clients. Thus, a bill recently introduced into the United States Senate by New York Senator Elizabeth Warren and Texas Senator John Cornyn is stirring intense controversy.
Most people in New York can identify three chapters of the United States Bankruptcy Code: Chapter 7 for the discharge of business and personal debts; Chapter 11 for business reorganization and Chapter 13 for personal debt reorganization. Very few can identify the purpose of Chapter 15. This post will provide a brief overview.
Most people in Rockland County probably view bankruptcy as a pain-filled process, second only to a trip to the dentist in that respect. However, when debts pile up and when mortgage payments are late, bankruptcy can be a significant pain-reliever. When dark financial clouds begin to gather, the beneficial effects of a consumer bankruptcy must be carefully weighed against the opprobrium that seems to automatically attach itself to any effort to use the bankruptcy laws to reduce debt and reorganize personal finances. In at least one case -- foreclosure of the mortgage on a residence -- bankruptcy provides a potential remedy for the debtor.
Making predictions is a popular pastime as the year draws to a close. Financial analysts who follow the retail and apparel industry are no exceptions. Moody's put together a list for USAToday of the retail and apparel companies most likely to file bankruptcy petitions in 2018. Many of the companies are headquartered in New York City, and virtually all have stores in the city or its suburbs.