Century 21 Stores, an off-price retailer with 13 stores across New York, New Jersey, Pennsylvania, and Florida filed for Chapter 11 bankruptcy protection
Century 21 Stores, an off-price retailer with 13 stores across New York, New Jersey, Pennsylvania, and Florida filed for Chapter 11 bankruptcy protection on September 10, 2020 in New York citing the nonpayment of the company’s insurance providers of approximately $175 million purportedly due under policies put in place to protect against losses stemming from business interruption such as that experienced as a direct result of the COVID-19 pandemic as the reason for the company’s filing and anticipated liquidation.
“While insurance money helped us to rebuild after suffering the devastating impact of 9/11, we now have no viable alternative but to begin the closure of our beloved family business because our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances like we are experiencing today, have turned their backs on us at this most critical time,” said Century 21 co-CEO Raymond Gindi in a press release regarding the bankruptcy filing. “While retailers across the board have suffered greatly due to COVID-19, and Century 21 is no exception, we are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery,” Gindi went on to say.
The company reportedly plans on removing the lawsuit pending in the Supreme Court of the State of New York against several of its insurance providers based on their failure to compensate the company for its losses under the policies to the Bankruptcy Court for the Southern District of New York. The Company is requesting that the Bankruptcy Court expedite the adjudication of the suit for the benefit of its stakeholders.
Century 21 Stores’ case is believed to be the first Chapter 11 retail case, in what has been a tidal wave of retail bankruptcies since the COVID pandemic started, that has directly cited the refusal of an insurance provider to pay claims related to losses stemming from business interruption as the reason for bankruptcy but it very likely won’t be the last of such cases filed.
Bankruptcy can be complicated. If you need help navigating your rights in the bankruptcy process as a potential debtor-in-possession or as a secured or unsecured creditor, contact the experienced bankruptcy attorneys at Goosmann Law in our Sioux City, Sioux Falls, and Omaha offices.