Major Companies That Filed for Bankruptcy Due to the Pandemic

Many familiar retailers and restaurants that already were reeling from changing consumer habits received a financial punch they may not overcome when the coronavirus pandemic hit earlier this year. Some will hang on by restructuring their companies — often including shuttering underperforming stores — through Chapter 11 bankruptcy reorganization. Others we may never see again as they liquidate and go out of business.

Here is a look at some of the most familiar names that have started bankruptcy proceedings since the pandemic hit.

1. J.C. Penney Co.

The national department store expects to live on with fewer stores and a new owner when it emerges from a bankruptcy reorganization.

“The Coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country,” CEO Jill Soltau, says in a news release in conjunction with the May bankruptcy court filing. At that time, J.C. Penney had announced plans to shutter about 150 stores. An attorney for J.C. Penney recently told a bankruptcy court judge that a sale of the company to new owners, rather than a liquidation, should be completed by fall, USA Today reports.

2. Neiman Marcus Group

The parent company of Neiman Marcus expects to emerge from bankruptcy reorganization in the fall after making a deal with creditors and trimming some of its luxury department stores and Last Call outlet stores. The company, which also operates Bergdorf Goodman and Horchow, filed for bankruptcy protection in May.

“Like most businesses today, we are facing unprecedented disruption caused by the COVID-19 pandemic,” CEO Geoffroy van Raemdonck says in a company statement issued at the time of the filing.

NOTE: As we all see these major stores begin to shutter, follow the proceedings as they traverse through the legal filings of bankruptcy and see who realizes a bonanza of golden parachutes. Those executives who have driven these stores into bankruptcy are not going to leave empty handed. Some like the CEO of J.C. Penney are planning to purchase those distressed properties at cut rate sales price and use them to enrich their bottom line. The snakes are and will get fatter!! The losers will be those stockholders and lower level employees whose portfolios will be devastated as the assets are sold off to creditors and corporate raiders. More to come, keep reading. Pt 2 of these bankruptcies will have additional major companies who are failing but sometimes not because of the pandemic but major mismanagement at the top.

Additional:

3. California Pizza Kitchen

California Pizza Kitchen is looking forward to a fresh start financially after filing for bankruptcy protection in July. “For many restaurants, the Covid-19 pandemic will be the greatest challenge they will ever face; for some, it may also be their last,” CEO James Hyatt declares in court documents.

The bankruptcy filing will allow CPK to close unprofitable locations.