PYMNTS-MonitorEdge-May-2024

Chapter 11 Watch: Takata, A Hanjin Update And Are Chico’s, Lands’ End Next Up?

Failing Retail Wheel And Deal

There’s been a lot of bankruptcy news this week. So, without further ado, here’s the latest in bankruptcy news and trends from the past week or so.

When Logan’s Roadhouse, the Nashville, Tennessee-based steakhouse chain, filed for bankruptcy in August it announced that it planned to close 34 of its 256 restaurant locations nationwide as part of a restructuring plan.

Well, it now appears that none of those closings will be in Alabama, as Alabama.com reported this week that the restaurant chain has no plans to close any of its 24 Alabama Logan’s Roadhouse locations. The company said it expects to emerge from bankruptcy sometime in November after renegotiating some of its leases and shedding $300 million in debt.

Takata, the beleaguered Japanese airbag maker, is facing bankruptcy rumors, which caused its stock to plummet this week after The Wall Street Journal reported that the company is considering a U.S. bankruptcy filing. Such a filing, according to WSJ, would clear the path for an outside investor.

Takata said in a statement on Tuesday (Oct. 11) that a bankruptcy plan was not something the company had publicly announced, but the markets didn’t seem to be buying it as the company’s stock fell as much as 10 percent.

Hanjin Shipping Co., the bankrupt South Korean shipping company, plans to sell off several major parts of its business, including its Asia-to-U.S. shipping network, the company announced on Thursday (Oct. 13).

Hanjin filed for bankruptcy at the end of August, which caused many economists to fear that the company’s bankruptcy could disrupt the global shipping network on the eve of the holiday shopping season (Hanjin was the world’s seventh-largest global shipping company at the time of its bankruptcy filing), and claimed a total debt of $5.41 billion, according to its court filing.

Since bankruptcy, Hanjin’s shipping capacity has shrunk to 17th in global rankings, according to shipping data provided by Alphaliner, while the Port of Long Beach said on Wednesday (Oct. 12) that container volumes in September fell 16.6 percent from a year ago, according to a Reuters report. Prior to bankruptcy, Hanjin accounted for 12.3 percent of the port’s total container volume.

Hanjin has received approval from the bankruptcy court to seek buyers for its assets, and creditors have until Oct. 25 to make claims against the company.

Facebook Cofounder Eduardo Saverin has found himself at the center of a bankruptcy lawsuit as a shareholder of Jumio Inc., an identity verification company, has sued Saverin and other former company executives after they, allegedly, “grossly mismanaged” the firm and drove it into bankruptcy, according to Forbes.

The suit, filed by Bloso Investments Ltd. in a Delaware court on Sept. 29, alleges that Saverin and other Jumio executives ran the company for years without proper financial or accounting controls in place and that the company protected executives during its bankruptcy filing at the expense of Bloso’s $5 million investment.

“There is no merit to these baseless allegations … Mr. Saverin acted responsibly in fulfilling his fiduciary responsibilities as director,” a spokeswoman for Saverin told Forbes in a statement. “He was harmed as much as, if not more than, any other investor of the company by former management’s actions and is, in fact, contemplating filing his own claims against them.”

Industry experts are watching Sears Holdings Corp. intently after a recent report from Fitch Ratings cited the company as one of seven prominent retailers that could be “at risk” for a bankruptcy filing in the next year to 24 months, but are there other big-name retailers that could be even more at risk?

That’s what a report from InvestorPlace seems to indicate, listing Lands’ End, Ascena Retail Group (the parent company of Ann Taylor, Lane Bryant, Dressbarn and other fashion retailers) and Chico’s as being in more “serious danger of falling into the abyss.”

PYMNTS-MonitorEdge-May-2024