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Requin at The Wharf in Washington, D.C., has joined the list of Mike Isabella restaurants in chapter 7 bankruptcy, the Washington Business Journal reported. The chapter 7 petition, filed Feb. 28 in U.S. Bankruptcy Court in Maryland, lists assets and liabilities of between $1 million and $10 million for ReqWharf LLC. Liabilities include $166,400 owed to the restaurant’s landlord and varying amounts to individual purveyors and food companies, employees and other service providers. The filing also values the build-out of Requin, including the equipment, furniture and other items, at more than $3 million. Isabella filed for chapter 11 bankruptcy reorganization for several of his restaurants and his parent company back in September, after he was sued for sexual harassment by a former general manager within his company. (He settled the suit in May 2018.) The once-prolific restaurateur converted the cases in December to chapter 7, or liquidation bankruptcy, saying that “it appears there are no meaningful operating businesses to reorganize.” Those cases did not include Requin at The Wharf, however, or Kapnos Kouzina in Bethesda. It does not appear that the Bethesda restaurant has filed for chapter 11 or chapter 7, though it is closed.

Modell’s Sporting Goods, the 130-year-old chain known to generations of New Yorkers for its catchy “Gotta Go to Mo’s” advertising jingle, has hired a restructuring adviser as it looks to turnaround its business in the face of sagging sales and competition from big-box stores and online retailers, WSJ Pro Bankruptcy reported. The retailer, which has more than 150 stores in the Northeast, has hired Berkeley Research Group as its financial adviser to explore its next steps. Options on the table include a possible bankruptcy filing, though the situation remains fluid. Berkeley Research Group has recently worked with a number of troubled retailers, including Things Remembered Inc., ShopKo and Gymboree Group Inc., all of which have filed for bankruptcy protection. Modell’s was founded in 1889 by Morris A. Modell, and its first store was located in lower Manhattan. Currently, Mitchell Modell is at the helm of the company, the fourth generation of the Modell family to oversee the chain.

Shuttered toy retailer Toys “R” Us’ real estate subsidiary has emerged from bankruptcy proceedings with a new name and organizational structure, FoxBusiness.com reported. The firm will now be called Hill Street Properties after previously operating as Toys “R” Us Property Co., or PropCo. Raider Hill Advisors, which advised the firm during bankruptcy proceedings last summer, will provide day-to-day oversight of the firm’s dealings and manage its remaining properties “including all leasing, redevelopment and disposition activities,” according to a press release. "It will be business as usual for the 168 remaining properties across 40 states,” Raider Hill founder and CEO Danial Hurwitz said in a statement. “We look forward to working with Hill Street as we continue to market these assets without any interruption of the numerous transactions already under contract or those currently in negotiation." Toys “R” Us declared bankruptcy last summer after years of declining sales. The retail giant liquidated its remaining stores after failing to find a buyer for its U.S. business.

A Neiman Marcus Group Ltd. bondholder that sued the company over the spinoff of its MyTheresa e-commerce business, has reached out to the luxury retailer with an offer to extend the company’s debt maturities by two years, the Wall Street Journal reported. Marble Ridge Capital LP, the bondholder, is seeking a 75 percent preferred equity stake in MyTheresa. The new proposal comes after Neiman disclosed it had reached an agreement in principle on a debt deal with another group of investors. The retail chain is offering a 50 percent stake in MyTheresa under that proposal, according to Neiman’s regulatory filing. Marble Ridge is leading a group that together owns $220 million in Neiman’s unsecured notes and $85 million in loans, out of total debt of $4.7 billion.

An analysis by tax expert Bob Willens of Robert Willens LLC found that Sears' bankruptcy reorganization is set up in a way that will allow Lampert, a hedge-fund operator who is Sears' principal creditor and its former controlling shareholder, to save about $2 billion of income taxes, according to a Washington Post reported. What's more, because of an odd intersection of tax law and bankruptcy law that we'll get to in a bit, those prospective tax savings are far more valuable to Lampert than they would be to any other would-be buyer or liquidator. That would have been one powerful motivation for Lampert to outbid competitors to become New Sears' controlling holder, according to the commentary. Over the years, Sears has run up about $5 billion of "net operating losses," according to Willens's report, and has also been unable to use about $1 billion of tax credits that it has earned. At current tax rates, the operating losses are worth about $1 billion. Add the unused tax credits, and you get about $2 billion of prospective tax savings.

U.S. retail sales stabilized in January after a plunge the prior month that was larger than first reported, indicating consumers may still be able to help support economic growth after a dismal end to 2018, Bloomberg News reported. The value of overall sales rose 0.2 percent after a 1.6 percent drop in the prior month that was the steepest since 2009, Commerce Department data showed yesterday. Sales in the “control group” subset, which some analysts view as a cleaner gauge of underlying consumer demand, rose 1.1 percent, topping estimates after a 2.3 percent drop in the prior month. The measure excludes food services, car dealers, building-materials stores and gasoline stations. Eight of 13 major retail categories showed improvement. The gains reflected the biggest jump for building materials since late 2017, the best rise for food and beverage stores since early 2016 and the strongest gain for sporting goods and hobby stores since 2013.

The company that holds the Palm Restaurant steakhouse’s trademarks filed for bankruptcy hoping to negotiate a settlement over disputed royalty payments among descendants of the 93-year-old chain’s founders, WSJ Pro Bankruptcy reported. Just One More Restaurant Corp., which licenses the Palm name to more than 20 restaurants in the U.S. and Mexico, entered chapter 11 protection on Thursday in the U.S. Bankruptcy Court in Fort Myers, Fla. The bankruptcy stems from a $120 million judgment issued by a New York court in January in favor of the company’s minority shareholders, who accused its majority owners of exploiting the business to benefit Palm-branded restaurants they owned. The company’s chief restructuring officer Gerard McHale said in court papers the judgment belongs to Just One More Restaurant, not the minority owners. Filing for chapter 11 prevents the plaintiffs from enforcing the judgment against the 80 percent majority owners Bruce Bozzi and Walter Ganzi, McHale said. There are two dozen Palm restaurants in operation, most of which are co-owned by Messrs. Bozzi and Ganzi and pay a $6,000 annual fee a restaurant for using Palm trademarks including the restaurant name and its décor, photograph displays, artistic caricatures and sketches. The minority shareholders — the cousins of Walter Ganzi — said in their lawsuit that those restaurants were paying less than market rates to license the trademarks, depriving Just One More Restaurant of revenue it was entitled to. A New York appeals court was scheduled to hear arguments March 11 on enforcing the judgment.

As the bankruptcy proceeding in U.S. District Court of Northern Ohio in Cleveland over Danny Vegh's, the half-century old retailer of pingpong and pool tables and home furnishings, enters its last rounds, Albert Ratner, former co-chairman and CEO of the former Forest City Enterprises Inc., has surfaced in a central role, Crain's Cleveland Business reported. Ratner, who ran the recently acquired Cleveland-based development firm for decades, is the only secured creditor in the group. Last fall, using the name 50 Public Square LLC, he bought KeyBank's secured debt against the Danny Vegh's business for $355,000. In a court filing, Ratner's attorney said that he bought the debt to help Kathy Hughes, the daughter of Danny Vegh, maintain the 55-year-old family business. Ratner is an investor in Tech Elevator, a coding boot camp operated by Anthony Hughes, Kathy Hughes' husband, and learned about its descent into bankruptcy from him, but had no other interest in the family business. However, things apparently became less friendly after Ratner found how little revenue was left in the business and began to push for liquidation, something the Danny Vegh's business itself agreed to do. The proceeding by DTV Inc., the formal name for the company that Kathy Hughes built on the original business of her father, pingpong champion and media personality Danny Vegh, on Jan. 9 was converted to a chapter 7 liquidation under the U.S. bankruptcy code from a chapter 11 reorganization by Judge Jessica E. Price Smith.

Tesla Inc. said that it would raise prices on a few of its electric vehicle models as the company changes some of its plans to close its stores in a shift to selling online only, the Wall Street Journal reported. The company said it had already closed 10 percent of its shops following last month’s announcement that it would shutter many of its stores. However, the company said today that it would reopen a few high-visibility locations though with a smaller number of employees. An additional 20 percent of store locations are under review. Tesla had 378 stores and services centers globally at the end of last year. In a February securities filing, Tesla said it has “various non-cancellable operating lease agreements,” and any effort by the company to terminate those leases could result in legal battles. The company has total lease obligations of $1.6 billion, with $1.1 billion due between this year and 2023, according to its securities filings. Read more. (Subscription required.) 

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.