Bankruptcy is designed to be the opposite of permanent for an individual or a business. Some types of bankruptcy filings allow people and entities to retain many of their remaining assets, while others force a liquidation of all but essential remaining property. When it comes to businesses, the choice is up to them and their creditors.
Chapter 11 bankruptcy, which is the most common type of commercial bankruptcy, is a filing that usually comes with or after an agreement between the filer and the organizations that has loaned or funded to it. Chapter 12 bankruptcy is a rarer filing reserved mainly for family-owned and other smaller businesses.
A major sporting goods retailer with a history extending back to the 19th century has agreed to close its remaining stores and liquidate its stock as it files for Chapter 11 bankruptcy. Four stores in Connecticut will be cut as part of the plan to join several other companies in quitting the premises retail business amid mounting costs and dwindling customer counts.
“Over the past year, we evaluated several options to restructure our business to allow us to maintain our current operations,” the company’s CEO said in a statement. While we achieved some success, in partnership with our landlords and vendors, it was not enough to avoid a bankruptcy filing amid an extremely challenging environment for retailers.”
Companies considering Chapter 11 bankruptcy as an option to financial issues may consider the case with an attorney. Legal representation may make it easier to file for bankruptcy and a lawyer may make a filing more likely to be accepted in bankruptcy court.