Shortly after filing for bankruptcy last week, Sears Holdings Corp. sent a letter to suppliers asking for their “ongoing support.” However, some vendors have stopped shipping products to the retailer over concerns they won’t get paid, Bloomberg reported. Their willingness to continue working with the department-store chain during bankruptcy will play a crucial role in whether the company survives. Suppliers had already been demanding better payment terms with the retailer over the past several years as its finances deteriorated. This included payment in advance of shipping for some vendors, instead of the traditional 60 days or so. Now that it has filed for chapter 11, the retailer wants terms that are less favorable for suppliers. Read more.
One of the worst outcomes for a business owner is having a major customer file for bankruptcy and leave behind a large unpaid account receivable. ABI's Business Creditor’s Guide to Distressed Vendors, Debt Collection and Bankruptcy provides an insider’s look into the options available to help screen a business’s customers, plan for worst-case scenarios, and, if the situation does arrive, efficiently handle the fallout.
