Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Law360 (January 14, 2021, 11:21 AM EST) -- Women's apparel company Christopher & Banks Corp. said Thursday the COVID-19 pandemic has driven it to Chapter 11, and that it plans to close most of its brick-and-mortar stores but will continue its e-commerce operations.
The Minneapolis-based company and two affiliates filed their petitions in New Jersey bankruptcy court late Wednesday. Christopher & Banks estimated its assets at $166 million and its liabilities at $105.6 million.
The company plans to close "a significant portion, if not all," of its physical retail stores, and a store closing and liquidation process is underway, Thursday's announcement said. Christopher & Banks currently operates 449 retail stores in 44 states, according to court filings. The retailer said it is also in discussions with potential buyers for its e-commerce platform.
Christopher & Banks signaled that such a move could be in the works in December, when it announced it was exploring its options and doubted its ability to survive 2021.
CEO Keri Jones said the COVID-19 pandemic pushed the company into Chapter 11.
"Due to the financial distress resulting from the pandemic and its ongoing impact, we elected to initiate this process and pursue a potential sale of the business in whole or in part to position the company for the future," Jones said in a statement Thursday.
Jones said in first-day declarations that before the pandemic hit, the company had already been grappling with trends affecting many retailers, such as the shift away from brick-and-mortar stores.
"The COVID-19 pandemic was the proverbial 'nail in the coffin' for the debtors following years of adverse market trends, including the shifting of sales from traditional brick-and-mortar retailers to online sellers, increased competition from big-box retailers, and changing consumer preferences," Jones said.
Christopher & Banks' secured debt stems from a revolving credit facility, a term loan and vendor financing, Jones' declarations said. The company also took out a $10 million loan through the Paycheck Protection Program, part of the federal government's pandemic relief package, court filings show.
A number of retailers have sought Chapter 11 protection in recent months, including women's clothing boutique chain Francesca's, which filed for bankruptcy in December; musical instrument retailer Guitar Center, which filed in November; and the parent company of retailer Furniture Factory Outlet, which hit Chapter 11 in early November.
A representative for Christopher & Banks did not immediately respond to a request for comment Thursday.
Christopher & Banks is represented by Michael D. Sirota, Felice R. Yudkin, Jacob S. Frumkin, Matteo Percontino and Rebecca W. Hollander of Cole Schotz PC.
The case is In re: 21-10269, in the U.S. Bankruptcy Court for the District of New Jersey.
--Additional reporting by Jeff Montgomery and Rick Archer. Editing by Marygrace Murphy.
Update: This story has been updated with additional information.
For a reprint of this article, please contact email@example.com.