So is this the new normal? Online shopping, Netflix, and takeout cuisine? When can we return to our favorite shopping malls, catch a new release movie, and get a bite to eat at the nearby bistro? We’re not the only ones asking these questions. Iconic businesses are keeping their fingers tightly crossed too as they try to avoid filing for bankruptcy relief.
The Coronavirus Pandemic has been brutal on both individuals and businesses. But just because a large business files for bankruptcy relief, it doesn’t necessarily mean that they are going out of business. In many cases, such businesses are filing for Chapter 11 bankruptcy, which essentially is a restructuring process. While Chapter 11 bankruptcy may help a business avoid closing its doors, it usually signals that changes are coming. Business survival in the Coronavirus Pandemic era means adapting to emerging market trends, such as online shopping, state mandates, and social distancing.
Chapter 11 bankruptcy differs from it’s cousin Chapter 7 bankruptcy. Most of us are familiar with Chapter 7 bankruptcy and how it wipes out an individual’s unsecured debts, including medical bills and credit card debts. Chapter 11 bankruptcy does not inherently mean that a business is shutting down. Typically the business is reorganized and a plan for its restructuring is formed so that the business can continue. Chapter 11 bankruptcy is typically associated with large businesses but it is possible for individuals with excessively large incomes and other financial holdings, such as famous athletes or Hollywood celebrities.
Below is a partial listing of iconic businesses that have filed for bankruptcy relief during the Coronavirus Pandemic. While the list continues to grow, we are starting to see the Coronavirus Pandemic’s effect on some familiar Toledo, Ohio stores.
- Bravo Cucina Italiano Restaurants
- The restaurant chain was acquired by FirstFood Global Holdings in 2018, but was hit hard by the Coronavirus Pandemic. The parent company filed for Chapter 11 bankruptcy in April 2020. Many Toledoans enjoyed eating at the former Franklin Park Mall location.
- Friendly’s Restaurants
- Founded in 1935, the ice cream restaurant icon still has about 130 company owned locations and hopes to restructure via Chapter 11 bankruptcy. At one time there were several Friendly’s Restaurants in Northwestern Ohio, including Bowling Green, Ohio where bankruptcy attorney Scott France grew up.
- Pier 1 Imports
- With more than 900 stores across the country, including several locations in Toledo, Ohio, the company was unable to find a buyer during the Coronavirus Pandemic. Pier 1 Imports filed for Chapter 11 bankruptcy in February 2020 and is poised to wind down.
- Ruby Tuesday
- The 100 year old dining icon filed for Chapter 11 bankruptcy relief in October 2020 but plans to continue operating its nearly 600 restaurants nationwide. It’s former Franklin Park Mall location was a popular gathering spot for locals looking for dinner and a movie, pre-Coronavirus Pandemic. At least the Chapter 11 bankruptcy reorganization avoids saying “Goodbye Ruby Tuesday.”♫
- Stein Mart
- The off-price department store chain filed for Chapter 11 bankruptcy in August 2020 with plans to shut down most of its stores. One such Stein Mart location is at the Westgate Village Shopping Plaza in Toledo, Ohio.
About The Author: Scott France is a bankruptcy attorney in Toledo, Ohio. As the owner of France Law Group, Scott France has represented many debtors in search of a fresh start.