By: Scott B. Riddle, Esq.

Bob Eisenbach at the Business Bankruptcy Blog directs us to an article  in the New York Law Journal by his partner Lawrence Gottlieb, the Chair of the Cooley Godward Kronish Bankruptcy & Restructuring Group, and Seth Van Aalten.  The artcle is entitled  "Is The Death Knell Sounding For Retail Reorganizations?" ( PDF version here).

The introduction and scope of the article —

[T]he scope of this article will be limited to the act’s amendment to, and introduction of, some of the more crucial Code sections affecting a retailer’s ability to meet its liquidity needs and obtain necessary postpetition financing — the linchpins to any successful retail reorganization effort.

Although it is still far too early to tell whether the act truly signifies the "death" of retail reorganization, it seems fairly evident that the changes wrought by the act represent the "worst of times" for retailers seeking to rehabilitate their businesses under Chapter 11 and the "best of times" for certain creditor constituencies, including utility providers, commercial lessors and taxing authorities.

I happened to see Bob’s post and the article just after reading about CompUSA’s restructuring, which includes closing 126 stores (including its stores in Atlanta, Portland and the NC Charlotte and Triangle areas).

CompUSA said its plans also include a $440 million cash capital infusion to bolster its balance sheet, major expense reductions and a corporate restructuring. The company said it will now focus its efforts on keeping a strong presence in its 103 stores in 39 states and Puerto Rico.

"Based on changing conditions in the consumer retail electronics market, the company identified the need to close and sell stores with low performance or non strategic, old store layouts and locations faced with market saturation," said Roman Ross, CEO of CompUSA. "The process began last week with the closing of four CompUSA stores and over the next 60 to 90 days, the company will close a total of 126 stores in the United States to focus on initiatives that enhance its top performing locations."

The Law Journal article timely discusses some of the hurdles retailers such as CompUSA may face in a Bankruptcy case if that becomes an option of them.

 Out of curiosity, I did a search for the top retailer Bankruptcy cases. The following is from

[Update] – Bob informed me that Larry Gottlieb has represented the creditors committees in two of these cases, Allied Stores and Montgomery Ward]

(Note: Ames Department Stores are included twice as they filed twice)






Federated Dept. Stores



Montgomery Ward Holding Corp.



Macy (R.H.) & Co. Inc.



Allied Stores Corp.



Southland Corp.



Ames Department Stores



The Circle K Corp.



Carter Hawley Hale Stores



Ames Department Stores Inc.



Revco D.S. Inc.