Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Aéropostale Files for Chapter 11 Bankruptcy
Author: Joel R. Glucksman
Date: June 22, 2016
Key Contacts
Back
Aéropostale files Chapter 11
Clothing retailer Aéropostale recently announced that it had filed for Chapter 11 bankruptcy protection. According to a report in Fortune, the company filed its bankruptcy petition late last month, even as it attempted to find a buyer.
Aéropostale decides to seek bankruptcy protection
Bloomberg reported that the company filed for Chapter 11 bankruptcy protection to lighten its staggering debt load. In the report, Aéropostale will seek to continue operations with a strategic sale to a buyer that assumes its debt liabilities.
Aéropostale’s financial struggles lead to insolvency
Aéropostale’s current financial issues have intensified for the last four years as its teen consumer demographic has sought out other clothing retailers. As a result, its sales have fallen from $2.29 billion in 2012 to $1.5 billion last year. Business Insider reported that its sales in March fell 6.7 percent over the same month last year.
Aéropostale’s liquidity issues also arise from a late 2015 dispute with one of its main vendors, MGF Sourcing US, an affiliate of Sycamore Partners, that loaned it $150 million for an 8 percent ownership stake in the company. Due to this dispute, Fortune reported that the company did not receive the loan and is currently hemorrhaging funds without a plan to control future costs.
As a result, the company’s stock price recently fell to 15.1 percent, a record low after a 27.7 percent drop. Fortune reported that this prompted the New York Stock Exchange to halt all trading in the company and de-list it from the exchange after it traded under $1 for an extended period. Aéropostale now has a market value of $30 million, a significant reduction from $3 billion in 2010.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
So what does the future hold for Aéropostale? Only time will tell. Otherwise, for more articles on retail companies filing for Bankruptcy, check out:
- Karmaloop Inc. files for Chapter 7 Bankruptcy Protection
- American Apparel Files for Chapter 11 Bankruptcy Protection
- Coldwater Creek, Inc. may file for Bankruptcy
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
- Locations: Red Bank, NJ, New York City, Little Falls, NJ
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
You Just Received a Federal Grand Jury Subpoena in New Jersey: Now What?
Receiving a federal grand jury subpoena is not something most businesses or individuals anticipate. While it can be concerning, a federal grand jury subpoena does not necessarily mean that you are being accused of wrongdoing. It does, however, mean that a federal criminal investigation is underway and that federal prosecutors believe you may possess information […]
Author: George McGowan
Why Every Business Should Conduct an Annual Insurance Coverage Review
Most New Jersey business owners purchase insurance policies, file them away, and assume they are protected if a claim arises. Without a regular insurance coverage review, many companies discover gaps only after a lawsuit, cyberattack, property loss, or other significant event occurs. An annual insurance coverage review can help businesses identify potential risks, ensure their […]
Author: George McGowan
Demand Letters & Cease and Desist Letters: When to Send One (and When Not To)
Businesses and individuals often encounter situations where another party breaches a contract, fails to pay a debt, or continues harmful conduct. In many such disputes, a precisely drafted demand letter or cease-and-desist letter serves as a powerful legal tool. It can frequently resolve the dispute and avoid litigation. While demand or cease-and-desist letters can resolve […]
Author: George McGowan
How to Effectively Use Contracts to Manage Risk
Key provisions in your contracts, including those relating to indemnification, insurance, and defense, are essential to contract risk management. While sometimes considered “boilerplate,” these provisions play a pivotal role when determining which party is responsible for certain costs and liabilities. They must always be negotiated and drafted carefully. Indemnification Clauses Businesses should never overlook the […]
Author: George McGowan
Understanding Portability for Estate and Gift Tax
Portability of estate and gift tax enables a surviving spouse to inherit any unused portion of their deceased spouse’s federal estate and gift tax exemption. So, if one spouse doesn’t utilize their full exemption, the surviving spouse can effectively double their exemption amount with regard to estate tax liability. For married couples, portability offers a […]
Author: Marc J. Comer
Pet Trusts in New Jersey and New York: A Practical Estate Planning Tool
For many of us, pets are more than companions—they are members of the family. Yet they are often overlooked or inadequately provided for when it comes to estate planning. A pet trust offers a legally enforceable way to ensure that your animal continues to receive proper care if you become incapacitated or pass away. As […]
Author: Marc J. Comer
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.