Super Storm Sandy hit many areas of New Jersey hard as it passed through our state. Many people lost property, including personal homes and businesses. For some in our state and throughout the nation, these losses ended with filing for personal or commercial bankruptcy in order to obtain help recovering from the damage caused by the storm.
One New Jersey business, a large retailer which specializes in discount clothing, is now seeking a commercial bankruptcy to assist as it waits for the payments from the insurance claim made after the storm. The retailer, Big M Inc, operates 129 stores in total. As a result of the storm, the company reports losing $6 million due to damaged inventory and closed operations at its stores and distribution center.
The Chapter 11 commercial bankruptcy that was filed by the company states that it owes $15 million to various creditors. As a reorganization, the company plans to close unproductive stores and take other actions to help ensure its profitability in the future. This, company officials state, will help to bring Big M Inc back to profitability and out of bankruptcy in the near future.
Filing for a commercial bankruptcy is a difficult choice for many businesses in our state. However, when an unforeseen event makes it impossible to repay creditors as is the case here, a commercial bankruptcy may be the best choice. Before making such a decision, company owners may find it helpful to review all applicable rules in order to determine how best to use the bankruptcy process for recovery and a return to profitability.
Source: NJBIZ, “Retailer seeks bankruptcy protection to rebuild from Sandy losses,” Katie Eder, Jan. 7, 2013