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September 10, 2020 – Century 21 Department Stores LLC and ten affiliated Debtors (“Century 21” or the “Debtors”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, lead case number 20-12097. The Debtors, a New York City-based discount retailer with 14 East coast stores, are represented by Lucy F. Kweskin of Proskauer Rose LLP. Further board-authorized engagements include (i) Berkeley Research Group, LLC as financial advisors, (ii) Hilco Merchant Resources, LLC as liquidation consultant and (iii) Stretto as claims agent.
The Debtors’ lead petition notes between 10,000 and 25,000 creditors; estimated assets between $100.0mn and $500.0mn; and estimated liabilities between $100.0mn and $500.0mn. Documents filed with the Court list the Debtors’ three largest unsecured creditors as (i) The CIT Group ($5.9mn trade debt), (ii) Phillips Van Heusen Corp ($4.8mn trade claim) and (iii) G-III Leather Fashions ($4.2mn trade claim).
In a press release announcing the filing, Century 21 advised of its “plans to commence a wind down of its retail operations and going out of business sales at its 13 stores across New York, New Jersey, Pennsylvania, and Florida after serving customers for nearly 60 years.The decision follows nonpayment by the Company’s insurance providers of approximately $175 million 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.
To accomplish an orderly wind down in the most efficient manner to maximize the value of its assets for the benefit of its stakeholders, the Company voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Concurrently, the Company is removing to the Bankruptcy Court a 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. The Company is requesting that the Bankruptcy Court expedite the adjudication of the suit for the benefit of its stakeholders.
The Company has filed with the Bankruptcy Court customary motions seeking authority to commence going out of business sales and uphold its commitments to customers and employees. The Company's lenders have consented to the use of cash collateral which, subject to Bankruptcy Court approval, will provide the liquidity necessary to support operations through the planned store closures."
The Debtors’ CEO commented further: "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…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."
About the Debtors
According to the Debtors: “Century 21 has been a New York City icon for nearly 60 years, legendary for its exceptional offering of designer brands at amazing prices. A pioneer and leader in high-end, off-price fashion retail, Century 21 offers men's, women's, and children's apparel, footwear, outerwear, lingerie, and accessories, along with beauty and home goods, at select stores and online at c21stores.com. The retailer is headquartered in Downtown Manhattan, with additional locations in New York, New Jersey, Pennsylvania, and Florida.”
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