Christmas Tree Shops has more than 80 seasonal retail stores, including multiple locations in Tennessee. A company executive recently stated that inflation and several other issues have caused serious economic struggles for the popular home goods company. In fact, the retailer follows other major brands, such as David’s Bridal and Bed, Bath & Beyond, in filing for Chapter 11 bankruptcy.
Christmas Tree Shops says it will only be closing 10 of its stores and does not expect to have to lay off a lot of employees at its remaining stores. This is a stark contrast to David’s Bridal, which plans to eliminate more than 9,000 employee positions. Christmas Tree Shops says its bankruptcy agreement will focus on restructuring finances and keeping its 70-plus stores open for business.
How is Chapter 11 different from other bankruptcy programs?
Chapter 11 bankruptcy is a valuable financial tool that can help a business owner overcome a financial crisis, especially one that is threatening a company’s ability to stay afloat. It is different from Chapter 7 and Chapter 13 bankruptcies in several ways. For example, Chapter 11 can sometimes be extended beyond five years whereas Chapter 13 requires the debt restructuring plan to be completed within five years.
Under Chapter 7 bankruptcy, major assets may be liquidated and proceeds used to pay back lenders. One of the greatest benefits of Chapter 11, as made evident in the case of Christmas Tree Shops and other retailers, is that it enables business owners to retain possession of their companies while restructuring of debt payments takes place. Any Tennessee business owner wishing to explore bankruptcy options may schedule a meeting with an attorney who is well-versed in this area of law.