Even large, well known and established businesses hit hard times, especially now, which is why bankruptcy has become such a hot news story. One of the most high profile bankruptcies recently has been J.C. Penney.
Nearing a bankruptcy exit
News from New York states that two major mall owners, Simon Property Group and Brookfield Property Partners, are finalizing a deal to buy J.C. Penney out of bankruptcy. Their plan is to continue operating the business moving forward, which will avoid liquidation and save about 70,000 jobs across the U.S.
SPG and BPP are the landlords for most of JCP’s locations, and post-acquisition, JCP would be valued at nearly $2 billion. As part of this bankruptcy reorganization, JCP will still have to close a third of its locations over the next two years, which would leave about 600 locations.
What JCP filed
JCP filed Chapter 11 bankruptcy protection in May after they temporarily shut down most stores. Chapter 11 bankruptcy is a reorganization focused bankruptcy with the hope of sustaining the businesses post-bankruptcy. They are just one of over 40 retailers who filed for Chapter 11 bankruptcy protection this year alone as consumers shift more and more to online shopping.
Options for consumers
Of course, every day New Yorkers will not be looking into a Chapter 11 bankruptcy protection, but they may still be looking for bankruptcy protection. This is usually done through either a Chapter 7 or Chapter 13 bankruptcy filing.
A Chapter 7 bankruptcy filing allows filers to keep most, if not all, of their property that is deemed essential. It also discharges, or erases, most, if not all, of the filer’s debts.
For that do not qualify for Chapter 7 though, there is Chapter 13 bankruptcy protection. This, like Chapter 11 bankruptcy, allows filers to reorganize their debt into an affordable payment plan, and it allows filers to keep much of their property deemed essential.
For those looking for bankruptcy protection, calling an attorney is always a smart move. They can guide potential filers through the process, or even explore other options as well.