Bon-Ton Stores recently decided that its dire financial situation required making a drastic move. For this reason, the business, which is the parent company of multiple department store chains, has filed for Chapter 11 bankruptcy. Any company in Massachusetts that is struggling to stay afloat financially may likewise be able to take advantage of this type of bankruptcy protection.
Bon-Ton has several brands, including Younkers, Elder-Beerman, Boston Store and Carson’s. Prior to the bankruptcy filing, the company announced that it was planning to shut down nearly 50 of its whopping 260 stores, so the bankruptcy filing may come as no surprise. The company is a victim of the digital age — which has snuffed out the lives of many retail companies — as well as heavy debt.
Considering that Bon-Ton has 23,000 workers and real estate spanning more than 20 million square feet, liquidating the company would have widespread implications. The company knows this and thus is trying to keep its locations open by simply selling the whole company. However, major downsizing or liquidation is a real possibility in a retail bankruptcy. An agency has already been hired to liquidate the company’s assets if no viable alternative is found.
Sometimes, market and industry conditions that are beyond a company’s control threaten the company’s existence. Fortunately, in situations where businesses’ liabilities outweigh assets, these companies can seek financial relief through Chapter 11 bankruptcy filings. With these filings, business owners in Massachusetts can receive new leases on life for their businesses with the hope of achieving financial success in the future.
Source: usatoday.com, “Bon-Ton Stores files Chapter 11 bankruptcy as department stores reel,” Nathan Bomey, Feb. 5 2018