There’s an unusual asset up for grabs in Century 21 Stores’ going-out-of-business sale: a stake in its long-shot legal fight against insurers, Bloomberg News reported. The New York department store company, which filed for bankruptcy in September, claims it’s owed more than $175 million from business interruption policies because COVID-19 devastated its operations, according to court papers. The claim is the most valuable possession that the doomed chain has left, and proceeds from selling it would help repay creditors after Century 21 closes for good. Thousands of businesses across the U.S. — including more than a dozen professional baseball teams and an iconic Hollywood restaurant — began similar legal battles against insurers after the virus crushed the global economy this year. But insurance companies have mostly prevailed, arguing that diseases can’t cause the physical damage needed to trigger a payout, or pointing to clauses that exclude viruses. Still, Century 21’s legal claim has found a buyer. Precisely who isn’t clear — lawyers for the chain have asked the bankruptcy judge to keep the identity a secret. The exact sale price wasn’t disclosed either, but the proceeds would be at least enough to pay off Century 21’s secured debt, which totaled more than $50 million at the time of the bankruptcy filing. A hearing is scheduled for today in New York.
