Who is liquidating ritz camera
This accelerated time is most clearly visible in the 16 full reorganizations in our study.
(The other 33 going concerns took the form of Section 363 sales).
Given that rejecting leases before they are assumed creates a general unsecured claim that sits below senior lenders but that rejecting leases after they are assumed creates an administrative claim above senior lenders, senior lenders will typically enforce a timeline that ensures all unwanted leases get rejected well in advance of the 210-day deadline.
And because it can take up to 90 days to run in-store going-out-of-business sales, senior lenders frequently attempt in as little as 120 days to mandate a decision on whether to liquidate or reorganize a debtor.
However, the period may be, and often is, extended for an additional 90 days by order of the Bankruptcy Court.
As leases are often some of the most important assets of a retail debtor, this deadline often drives the schedule of a bankruptcy case.
Calls to the company for comment were not returned by press time, and employees at several stores declined comment.
Specialty photo retailers have struggled to remain relevant as consumers trade film for digital cameras and gear becomes more readily available online and at department and discount stores, such as Wal-Mart and Target.Prior to the 2005 changes, retailers often spent several years in bankruptcy—time they could use to test merchandising changes, to turn around marginal stores, and to try out new concepts during a holiday season.The changes made by way of the 2005 Bankruptcy Code dramatically altered that timeline, effectively giving retailers only a few months to obtain approval for a sale or reorganization before getting forced into liquidation.Obligations of the debtor arising after the petition date may be classified as administrative expenses and are generally paid in full.In contrast, pre-petition claims are paid pro-rata at the end of the case. Many commercial leases provide that rent comes due on the first of the month.
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Specifically, retail debtors often only have a few weeks or months to sink or swim before it becomes necessary to employ store-closing or going-out-of business sales to liquidate inventory.