CALL FOR A CONSULTATION
Bridal retailer Alfred Angelo has announced its decision to shutter its stores across the U.S. after filing for protection under Chapter 7 bankruptcy. Alfred Angelo Bridal Signature Stores are located throughout the United States with local stores in Cherry Hill, NJ and Whitehall, PA. The business operates more than 1,400 locations around the world.
Alfred Angelo announced that it will liquidate assets under Chapter 7 bankruptcy. According to Wall Street Journal, managers of the stores weren’t advised of the store closings in advance. Customers weren’t provided with advance notice.
Some customers were alarmed at the news. They want to know if they will receive merchandise they’ve already purchased from Alfred Angelo. Purchasing a wedding dress, bridesmaids’ dresses, mother-of-the-bride dress, and other items can involve thousands of dollars to the bride and her party.
Although filing a Chapter 7 bankruptcy may be a valuable option for a limited liability company (LLC) or corporation going out of business, it’s definitely frustrating for employees to learn they don’t have jobs.
How does filing a Chapter 7 bankruptcy help a company like Alfred Angelo?
A corporation or LLC doesn’t receive a bankruptcy discharge of its debts by filing a Chapter 7. The decision to file Chapter 7 involves liquidating the company’s available assets to pay outstanding obligations:
- Exemptions aren’t available in a business bankruptcy
- The business’ assets are sold. The proceeds are distributed to creditors “according to priority.”
Chapter 7 bankruptcy is a relatively easy, orderly, and complete liquidation of the business. When an LLC files a Chapter 7, it’s the trustee’s duty to sell the business’ assets and to pay creditors. In that way, the owners of the business aren’t required to directly settle with their creditors.
The presumption that Alfred Angelo is filing a Chapter 7 is a declaring that the business is closing. Perhaps the owners of Alfred Angelo tried to sell the business but failed to find a buyer.
The owners don’t have the option to operate or negotiate the sale of their stores under better terms. It’s usually possible to sell a company’s assets at a more favorable price than the bankruptcy trustee might.
If you are contemplating a personal or business bankruptcy, you need an experienced bankruptcy attorney. Contact The Law Office of Joel R. Spivack in Cherry Hill, NJ at 856-488-1200 to discuss your potential case in confidence. We represent clients throughout the South Jersey and greater Philadelphia metro areas.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.