Most Tennessee shoppers are familiar with the popular retail chain known as Belk. The department store was launched in the late 1880s and currently has approximately 300 stores in 16 states. Like many retail stores, Belk has encountered financial problems, and it recently filed for Chapter 11 bankruptcy.
Using bankruptcy as a valuable debt relief tool
This strategic move will allow the Belk to cut its debt by as much as $450 million. Chapter 11 is a type of bankruptcy that enables a business to reorganize its financial obligations. When a company files for Chapter 11, the court will consider a reorganization plan submitted by the company to restructure its debts.
One of the greatest benefits of this particular type of bankruptcy is that the company in question can usually remain open for business while the plan is implemented. There are rules regarding business operations during a Chapter 11 bankruptcy, however. Such rules often include restrictions about what a business that has filed for Chapter 11 can do, such as expanding or selling assets.
Belk says workers will not lose jobs because of bankruptcy
A Belk spokesperson said the recent Chapter 11 filing will not prompt any worker layoffs during the bankruptcy process. The representative also stated that no stores will be closing while the debt relief plan is carried out. Belk has asked the court to allow it to continue to pay its employees and also to continue to offer its gift card program during bankruptcy proceedings. The company says it is hopeful that the court will grant its requests.