COVID-19 has resulted in serious financial hardship for individuals and businesses alike. In Connecticut, the detrimental effects of the pandemic have shaken the economy to the point that previously well-established consumers and companies are facing insurmountable debts due to reduced income that render current living expenses and the costs of operating a business unsustainable. Many consumers — and especially businesses — have either considered filing or already filed for bankruptcy protection in Connecticut, some as a preemptive measure to foreclosure. However, a recent bankruptcy petition by the oldest retail chain in America has once again brought the country’s dire economic situation to the forefront.
The iconic retail staple, Lord & Taylor, filed for Chapter 11 reorganization bankruptcy protection on August 1. Soon after, the company announced that three of its four stores in Connecticut will be closing — one of which, the store at Westfarms mall in Farmington, traces its roots back to the state’s very first Lord & Taylor store that opened in 1953.
What Is Driving Retailers to File for Bankruptcy?
While many retailers remain in business during the pandemic due to an increase in online sales, other companies, which have traditionally derived the bulk of their sales from in-store purchases, have been struggling to keep up with the new shopping norms.
Like Lord & Taylor, several other major retail chains who have been on the brink of financial collapse or are facing foreclosure on their storefronts, have also opted to file for bankruptcy as a means to remain in business. Meanwhile, less prominent retailers who have significantly smaller target audiences and either poorly marketed or nonexistent e-commerce platforms are looking at potentially shutting down their stores permanently.
Although larger retailers may have incurred their fair share of exorbitant debts due to the pandemic, the sum of their assets is large enough to render them able to qualify for Chapter 11 reorganization bankruptcy. Local shops that lack this level of asset-backed security may have no other choice than to file for Chapter 7 liquidation bankruptcy and close their doors forever.
How a Bankruptcy Lawyer Can Help Connecticut Retailers and Business Owners Overcome Debt
If you own and/or operate a retail business in Connecticut, be it a clothing, grocery, or hardware store, and have amassed more debt than you can comfortably pay per month, you may qualify for bankruptcy protection. However, bankruptcy filings must be executed with the utmost attention to detail to prevent any unnecessary seizure of your assets. For this reason, any retailer who is considering filing for Chapter 7 or Chapter 11 bankruptcy in Connecticut should speak with an attorney.
Bankruptcy lawyers review your debts in comparison to your assets and advise you on the chapter that’s best for your particular circumstances. If you are tired of being in debt and want to protect your business, seek legal counsel today.