Retail Bankruptcies: New Article Examines How The 2005 Bankruptcy Code Amendments Have Impacted Retailers
I wanted to let you know about a new article recently published in the New York Law Journal by my colleagues Lawrence Gottlieb, the Chair of the Cooley Godward Kronish Bankruptcy & Restructuring Group, and Seth Van Aalten.
Entitled "Is The Death Knell Sounding For Retail Reorganizations?," it examines how the changes made by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (also known as BAPCPA) have significantly affected the ability of retailers to reorganize under Chapter 11 of the Bankruptcy Code. (A PDF version of the article is available here as part of a New York Law Journal special report on corporate restructuring and bankruptcy.)
The article discusses, among other issues, the impact on a retailer's liquidity of the new 210 day limitation on the time to assume or reject commercial real estate leases, the new "20 day goods" administrative claim, amended utility deposits requirements, increased employee priority amounts, and changes involving ad valorem taxes.
It makes for very interesting, if troubling, reading for retailers and their vendors, as well as anyone else with a stake in the reorganization prospects of these businesses.
