Client Alert

Three Issues to Navigate to Avoid a Retailer's Liquidation

January 30, 2023

By Frank Merola,Gabe Sasson,

& Samantha Martin

Retail reorganizations fail at an alarming rate. While nearly half of all large retail Chapter 11 cases that begin with aspirations of reorganizing ultimately liquidate, only a small fraction of mega cases in other industries end in a liquidation.

As a result of the retail business model and certain requirements of the U.S. Bankruptcy Code, the fate of nearly all retailers is dependent upon their ability to (i) timely analyze the profitability of their brick-and-mortar footprint, (ii) stay ahead of their ongoing administrative costs, and (iii) demonstrate to creditors that a capital structure reorganization will yield greater returns than a liquidation of inventory.

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Practice Areas

Financial Restructuring

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Image: Frank Merola
Frank Merola

Partner, Corporate Department

Image: Gabe Sasson
Gabe Sasson

Partner, Corporate Department

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