When Louisiana businesses begin to struggle financially, owners must consider all possible solutions to ensure their businesses remain open. One option owners may consider is Chapter 11 bankruptcy. With a substantial interest payment ahead, children’s clothing retailer Gymboree is reportedly preparing to file for bankruptcy in the near future.
According to news sources, Gymboree has not posted an annual profit since 2011, in which the company suffered more than $800 million in losses. One reason cited for these losses is because of a decline in mall shopping due to the emergence of more online retailers. The rise of specialty shops in malls is another factor that has had an impact on the company’s profits.
Gymboree reportedly owes more than $1 billion as a result of a 2010 buyout. The goal for the company is to reorganize its debt load. It may transfer control to its lenders to help do so. By filing for Chapter 11 bankruptcy, Gymboree will have the chance to restructure their finances while it pays its debts. This will also allow it to keep most, if not all, of its 1,300 stores open during this time.
Louisiana business owners who are facing significant debt problems may benefit from filing Chapter 11 bankruptcy. An experienced bankruptcy attorney could assess a client’s situation and determine whether bankruptcy is the best solution. An attorney could also provide more information and assist clients in the filing proceedings. This could be the first step for business owners to regain financial stability and keep their businesses running to continue providing services to customers.
Source: bloomberg.com, “Gymboree Is Said to Prepare for Bankruptcy as Payment Looms“, Lauren Coleman-Lochner and Jodi Xu Klein, April 11, 2017