Huge Chapter 11 bankruptcy deals malls, landlords a tough blow
While a number of retailers have gone out of business, this latest one will hurt more than most of the others.
When a retailer goes bankrupt, it causes a problem for its landlord.
In many cases, the chain will be behind on its rent with no plan to pay that money back. A Chapter 11 bankruptcy could forestall the store closing by giving it time to conduct a going-out-of-business sale.
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The landlord may see some money from that sale but could also be behind vendors, employees, and some lenders on the repayment list. Once a store closes, it will generally need remodeling before another tenant can move in.
In addition, while all this is happening, the mall has some of its real estate tied up in a dying or dead store. That's not a big deal when its one store, but when several mall retailers go out of business in the same timeframe. the damage can escalate.
