Modell's to liquidate despite coronavirus

Modell's, which recently filed for bankruptcy, received the go-ahead from a New Jersey judge to move forward with liquidating their stores around the country. The stores landlords were saying that with all the cancelled sporting events, this will eat into the revenues of the planned going-out-of-business sales, and had wanted Modell's to hold off on liquidating.

Law 360 reported that despite the issues raised that the sales would not cover post-Chapter 11 rent, U.S. bankruptcy court judge Vincent F. Papalia approved preliminary orders authorizing Modell's to use cash collateral and begin liquidation sales, informing landlords immediate action was needed and objections could be filed or changes could be sought before he rules on final orders in three weeks.

"These are uncertain times, and there might be some bending to reflect that," Papalai said to Law 360.

Modell's currency operates 153 stores, mostly in the Northeast. In their bankruptcy filing Modell's pointed to a decline in brick-and-mortar sales, increased competition from online, and customers buying less winter products due to warmer winters as a result of their demise. The company said that it has 43.4 million dollars in unsecured debt, 100 million dollars in unsecured claims, and a pension underfunded by 25.8 million dollars.

Modell's attempted to find a buyer, but failed. The going-out-of-business sales, expected to run through April 25, are expected to cover both secured debt and post-petition costs.

photo: via Modell's Facebook page