The Wall Street journal reports that Gymboree is on the verge of filing a bankruptcy with the likely closure of their stores. Locally there are several stores including at the Cherry Hill Mall in Cherry Hill New Jersey, The Promenade at Sagemore in Marlton NJ and the Deptford Mall in Deptford NJ. In Philadelphia Pennsylvania the store at the Philadelphia Mills Mall would be impacted. The bankruptcy will be just another reminder of the difficulties retail chains face today.
Section 1301 of the Bankruptcy Code is entitled "Stay of Action Against Codebtor". If an individual files a bankruptcy while living in, say, Pennsauken, NJ and his ex-wife, living in Philadelphia, PA had cosigned for a credit card while they were married, can the creditor pursue the ex-wife since she is not in bankruptcy? Not when a Chapter 13 is filed. Section §1301 of the bankruptcy code provides a "Codebtor" Stay in Chapter 13 Bankruptcy. A "Codebtor" Stay protects a vehicle from being repossessed and protects a debtor's residence from a foreclosure sale when only one of the individuals responsible for the debt files Chapter 13. A "Codebtor" Stay does not apply to Chapter 7 bankruptcies or business debts. There are other exceptions. For example, although a liability on a personal tax return would seem to be a consumer debt a number of cases have held that the co-debtor stay does not prevent the IRS from pursuing the spouse that did not file a bankruptcy on a joint return.
A Bankruptcy ultimately was not enough to save a Philadelphia Pennsylvania diner. According to Philly.com at http://articles.philly.com/2016-06-02/business/73496318_1_diner-bankruptcy-health , during the last two years, the Midtown II diner at 11th St and Sansom St in Philadelphia was cited by the sanitations department for 125 health code violations, 66 of them serious.
Since bankrupcy is a federal law, whether filing bankruptcy in Voorhees, New Jersey or Philadelphia, Pennsylvania, the information to be provided is the same. Section 521 of the bankruptcy code, entitled "Debtor's Duties" lists different requirements. The debtor needs to provide 1.) a list of creditors, 2.) a schedule of assets and liabilities, 3.) a schedule of current income and current expenditures, 4.) a statement of the debtor's financial affairs, 5.) a bankruptcy petition signed by the debtor's attorney, 6.) copies of all payment advices received within 60 days before the date of the filing of the petition, 7.) a statement of the amount of monthly income, 8.) a statement disclosing any reasonably anticipated increase in income or expenditures over the 12-month period following the date of the filing of the petition, 8.) a statement of the debtor's intention with respect to the retention or surrender of property, 9.) a copy of the debtor's federal income tax return. In addition, a trustee may ask for additional information such as bank statements, deeds, etc.
Bankruptcy filings have dropped in the last year nationwide as well as locally in Camden County NJ, Burlington County NJ, and Philadelphia County PA. However, as can be seen from the statistics published by the US Courts, there are still a significant number of bankruptcies being filed. 25,763 were filed in NJ of which 2285 were filed in Camden County and 1686 were filed in Burlington County. Statewide that is an average of over 70 bankruptcies per day. In the Eastern District of Pennsylvania 9,533 were filed last year with 2,817 being filed in Philadelphia PA. Set forth below is the breakdown of the different types of bankruptcies filed, and whether they were personal bankruptcies or business bankruptcies.
Every year companies of varying sizes may be forced to file bankruptcy or go out of business. This can be small mom and pop businesses in places such as Moorestown New Jersey and Philadelphia Pennsylvania or large name brands. Each year 24/7 Wall St compiles a list of ten brands that it expects to disappear due to bankruptcies or mergers. This year's list includes Smart, OfficeMax, American Apparel, Pacific Sunwear of California, A&P, Volkswagen's TDI Brand, US Airways, Ashley Madison, RadioShack and Sears. It is difficult for some retail brands to compete. Larger retailers with a lot of stores, greater marketing budgets and stronger balance sheets are replacing them. E-retailers, like Amazon.com, are also responsible for disappearing retail brands. Sometimes other events can cause a downfall. Devastating events like hacking of the website for Ashley Madison or the diesel scandal for Volkswagen have impacted those brands. Even success can impact a brand by leading to its disappearance through merger. Changes in the economy, competition and management issues can impact companies large and small.