Listen Now: Major Retailers File For Bankruptcy Amidst COVID-19
Some major retailers are filing for bankruptcy… but that doesn’t mean they’re going out of business.
Over the past week Neiman Marcus and J. Crew filed for chapter eleven bankruptcy protection. Immediately after, customers took to social media griping about the end of their favorite stores. But according to Fortune Magazine, filing for bankruptcy wasn’t the end of anything.
Instead the companies are heading to a stable and debt-free future. Experts say the purpose of chapter eleven is to give the company a chance to restructure by wiping out debt to make the situation more manageable. Other companies to file include General Motors, American Airlines and PG&E, all companies still in business.
One major retailer to file chapter eleven was Macy’s. It filed in 1992 and twenty-eight years later it has stores open all across the country. In the case of J. Crew, it’s debt of one point seven billion will be converted into equity so its creditors become owners. Neiman got rid of eighty percent of its debt giving it a clean slate.
Sometimes, the end is only the beginning.
CBS News Radio national business journalist Brian Banmiller has spent more than 40 years in the news industry, covering business, politics and the economy on television, radio and in print. Currently, his “Banmiller on Business” reports are delivered to an audience of millions nationwide.
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