John W. Weiss Quoted in Modern Retail Article “Bankruptcy Filings Soared in 2023 as Retail Companies Ran Out of Lifelines”

John W. Weiss, chair of the Bankruptcy, Restructuring & Creditors’ Rights practice at Pashman Stein Walder Hayden P.C., was quoted in a Modern Retail article titled “Bankruptcy Filings Soared in 2023 as Retail Companies Ran Out of Lifelines.” The article discusses the significant increase in bankruptcy filings by retailers in 2023 and the issues that contributed to the increasing trend.

Attorney John W. Weiss…said this uptick in filings could continue into 2024 as companies wrestle with something of “a perfect storm” — distress on the revenue side paired with a dampened ability to refinance or extend credit. “When businesses hit distress in conjunction with capital markets that aren’t as willing to refinance or extend, this situation is causing an increase in bankruptcy filings,” he said.

Some of the companies that filed for bankruptcy this year had racked up billions in debt. Rite Aid reportedly has about $4 billion when it filed this fall. Bed Bath & Beyond had at least $1.7 billion, and Party City had nearly $1 billion. “Years ago, when capital was very available and a company got into a distressed situation, they would engage with their lender, and resolve their debt with existing lenders, or they might go out into the market and find alternative pricing,” Weiss said.

Weiss said that companies that are filing for Chapter 11 are increasingly coming to court with potential buyers or sale plans lined up. While the fundamental process remains the same for companies that want to address debt and any underperforming assets or leases, they’re doing “more pre-planning than ever before.”

The end result of negotiated filings like this, Weiss said, is often a speedier case.

“The timing of companies remaining in bankruptcy cases has reduced dramatically over the last several years,” said Weiss.

To read the full article in Modern Retail, click here.