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Retailer Charming Charlie Holdings Inc. filed a motion seeking court approval to quickly offload its intellectual property, arguing that it needs to start the sale before its store closing sales wrap up at the end of August, Bloomberg News reported. Assets potentially up for grabs include trademarks, domain names including charmingcharlie.com, customer files and related transaction data, and social media assets. The retailer says that it needs to begin the sale immediately to “ensure that name recognition in the marketplace remains and there are still employees available to assist with diligence requests.” The case is Charming Charlie Holdings Inc., 19-11534, U.S. Bankruptcy Court for the District of Delaware.

The owner of the nearly vacant ShoppingTown Mall says it plans to file for reorganization in bankruptcy court to avoid a tax foreclosure, Syracuse.com reported. Edward Sklyaroff, CEO of Shoppingtown Mall NY LLC, said yesterday that he has directed mall officials to file for chapter 11 reorganization. ShoppingTown Mall NY LLC is an entity created by Moonbeam Capital Investments LLC, of Las Vegas. The mall’s move was not unexpected. Onondaga County is trying to seize the mall due to more than $9.7 million in unpaid property taxes dating back to 2015. It wants to turn it over to the Onondaga County Industrial Development Agency for redevelopment. The mall has sued the county to try to stop the foreclosure, but a chapter 11 filing could put all foreclosure efforts on hold. ShoppingTown opened in 1954 as an open-air plaza and was converted into an enclosed mall in 1975. Since 2015, it has lost a long list of tenants, including Macy’s, Dick’s Sporting Goods, J.C. Penney and Sears. Moonbeam bought the mall at auction for $14 million in 2013 and announced plans to turn it back into a shopping plaza, but those plans have gone nowhere. The company wants the mall’s tax assessment lowered from $36.7 million to $3.7 million.

Lolli & Pops Inc., a San Francisco-based candy retailer with 69 U.S. shops, has filed for bankruptcy after being locked out of about 10 percent of its stores last week, WSJ Pro Bankruptcy reported. The purveyor of such sweets as strawberry-champagne bark, blue-raspberry cotton candy and cookies-and-creme crispycakes sought protection from creditors Monday in U.S. Bankruptcy Court in Wilmington, Del. Paxion Capital LP has offered to provide up to $7 million in financing to help Lolli & Pops look for a buyer while under bankruptcy protection. The Menlo Park, Calif.-based investment firm is also a major equity investor in the business, as is Greenoaks Capital Partners LLC. Other shareholders include Riverwood Capital and V-Ten Investments LLC, a court filing says. Unsecured creditors include First Republic Bank , which is owed $7 million for a loan, the retailer said in court papers. The company’s “liabilities are mostly with its vendors and landlords,” said Chief Restructuring Officer Jeff Nerland in a court filing. The chapter 11 petition lists liabilities ranging from $10 million to $50 million.

Almost four months ago, the bankrupt estate of Sears Holdings Corp. sued Eddie Lampert and U.S. Treasury Secretary Steven Mnuchin over allegedly wrongful transfers of $2 billion in company assets, Bloomberg News reported. Now lawyers representing the two men have asked the federal judge overseeing the retailer’s chapter 11 case to lift the bankruptcy stay so Sears insurance policies can pay their legal fees, according to a new court filing. Before Sears went bankrupt in October, the company carried a $150 million insurance policy that covered its officers and directors against legal fees and expenses, according to the filing. Lampert was chairman of the Sears board starting in 2005 and chief executive officer from 2013, while Mnuchin was a director of Sears from 2005 until 2016, court papers show. “The director defendants should be permitted to immediately obtain reimbursement for their fees and expenses in accordance with the policies’ terms,” the filing states. Lawyers for a handful of other Sears directors, including Thomas Tisch, Alesia Haas, Kunal Kamlani and Bruce Berkowitz, also asked for the stay to be lifted so the insurance could pay their clients’ legal fees. The estate doesn’t object to lifting the stay for the insurance payments, according to the filing. 

Forever 21 Inc. is scrambling to line up additional financing this month as cash to pay vendors and landlords dwindles to a critical level, Bloomberg News reported. The clothing retailer is in discussions with potential lenders for financing including a so-called FILO loan. Fresh cash is key as Forever 21 heads into the period for building holiday inventory while its business is struggling. Named after the “first-in, last out” accounting method for inventory, FILO loans are senior debt backed by a company’s inventory and other assets and supplement the so-called asset-based loans retailers use for their primary needs. The retailer has hired a team of advisers, Bloomberg previously reported, to help it restructure its debt and revive its business. Co-founder Do Won Chang is determined to maintain control, which could limit the company’s options. A small faction of Forever 21 officials have asked its biggest landlords to consider taking a stake in the company amid disagreement within its leadership on how to turn the company around.

In the first seven months of the year, U.S.-based companies announced 42,937 job cuts due to bankruptcy, up 40 percent on the same period last year and nearly 20 percent higher than all bankruptcy-related job losses last year, a report released Tuesday concluded, MarketWatch.com reported. Despite record-low unemployment, bankruptcy filings have not claimed this many jobs since the Great Recession. “It is the highest seven-month total since 2009 when 50,258 cuts due to bankruptcy were announced,” according to the report by outplacement and business coaching firm Challenger, Gray & Christmas. “In fact, it is higher than the annual totals for bankruptcy cuts every year since 2009, when 50,911 were announced for the entire year.” Companies cited bankruptcy as the reason for 11.6 percent of all job cuts announced from January to July. That’s compared to 11.3 percent of all cuts for the same period in 2018. Since 2007, bankruptcy has accounted for approximately 6 percent of all job cuts every year. The Challenger report tracks planned job cuts publicly announced by U.S.-based employers. Read more. 

Click here to read ABI’s press release on July bankruptcy filing statistics. 

Eddie Lampert suffered a setback in federal court this week when a judge effectively ruled that some of his claims against the bankrupt estate of Sears Holdings Corp. have so little priority that they are likely worth a fraction of what he’s demanding, Bloomberg News reported. The decision probably means Lampert’s ESL Investments Inc. and other second-lien creditors will get far less than the $718 million they’re collectively asking from “Old Sears,” the legal shell that was left over after the chain’s 2018 bankruptcy to pay remaining claims. It’s just one of many issues over which Lampert and the Old Sears estate have locked horns since he bought the business out of bankruptcy. It also comes as the money remaining in the estate to pay claims has dwindled to an estimated $5 million, putting it on the edge of administrative insolvency. While the duel could have an impact on the finances of former lenders to Old Sears, which includes Cyrus Capital Partners LP and Lampert’s ESL, the Sears retail chain is now a separate entity, and its fate is no longer tied to Old Sears. The Sears estate successfully blocked an attempt to classify the debt held by second-lien lenders as administrative claims, which get higher priority in the pecking order of payments, according to a court filing. That means the second liens — the kind of debt held by ESL and Cyrus — will likely get paid out at a discount along with other lower-priority claims. ESL and Cyrus argued in June that the Sears estate wrongly sapped the value of the collateral supporting their debt. An expert hired to support the second-lien lender’s claims said in a court filing that the lenders are entitled to an administrative claim of about $718 million. Judge Robert Drain disagreed. He said that because there was no drop in the value of the second-lien holders’ collateral, those lenders aren’t entitled to any of the estate’s wind-down account, according to his decision filed Monday afternoon.

J.C. Penney Co. creditors are pushing for discussions on a possible debt swap that would give the company’s new managers more time to turn the struggling retailer around, Bloomberg News reported. Some of the department-store chain’s bondholders are seeking to rework a portion of its $4 billion of debt well ahead of their maturities in an effort to avoid the last-minute brinkmanship that contributed to the bankruptcies of Toys “R” Us Inc., Sears Holdings Corp. and Barneys New York Inc. A possible deal could include swapping second-lien notes into higher-priority debt, giving creditors additional collateral, or compensating investors with higher coupon securities in exchange for extending maturities, said the people, who asked not to be identified discussing private negotiations. The fact that a handful of the J.C. Penney’s creditors are believed to also be sellers of near-term derivatives that protect against default is seen as a key driver in the push for formal talks, which haven’t started yet.

Some billionaire hedge-fund managers buy sports teams. Richard Perry snapped up one of New York’s most influential luxury department-store chains. Perry’s passion project — Barneys New York Inc. — filed for chapter 11 protection yesterday with plans to close 15 of its 22 stores and with new financing that gives it time to find a buyer, the Wall Street Journal reported. Barneys’ troubles reflect the litany of woes hurting retailers across the U.S.: The company faced a sky-high rent increase and ran into difficulty navigating the rise of e-commerce. The unraveling of Barneys is a blow for Perry, who developed a personal interest in the fortunes of the nearly century-old company known for taking chances on little-known designers. Perry’s hedge fund gained control in 2012 by swapping its debt for equity. All in, Perry Capital invested less than $300 million, a fraction of what it once managed. Perry shuttered his fund in 2016, though it continues to hold several less liquid assets, including the Barneys stake.

U.S. luxury department store chain Barneys New York Inc. filed for chapter 11 protection today and put itself up for sale after facing soaring rents and failing in its earlier attempts to find a buyer for the cash-strapped retailer, Reuters reported. Barneys secured $75 million in new financing from affiliates of Hilco Global and the Gordon Brothers Group to help it keep operating as it navigates the bankruptcy court, it said in a statement. The retailer will close its physical stores in Chicago, Las Vegas and Seattle, along with five smaller concept stores and seven Barneys Warehouse locations. Barneys for weeks has been searching for a buyer or an investor, grappling with a crisis due to a steep hike in rent at its Manhattan flagship store on Madison Avenue to roughly $30 million from $16 million. Barneys listed assets and liabilities in the range of $100 million to $500 million in the voluntary chapter 11 document filed in the U.S. Bankruptcy Court for the Southern District of New York. Barneys filed for bankruptcy once before, in the late 1990s, and also completed a more recent debt restructuring outside of court proceedings in 2012 that handed ownership to a hedge fund run by financier Richard Perry and an investment firm founded by supermarket magnate Ron Burkle. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.