As the number of big-name retailers filing for bankruptcy grows, consumers are beginning to wonder what exactly this means.
Robert Hoglund of Hoglund & Mrozik, P.L.L.C. shared his bankruptcy expertise during a segment with KARE11 News.
The interview that appeared on the August 3rd nightly news touched on the frequently asked questions surrounding bankruptcy and what it means for consumers and businesses.
Many consumers are curious whether corporations like J. Crew and JC Penney will be shutting down because they have filed for bankruptcy protection. According to Hoglund, just because a company files for bankruptcy protection does not mean it will seize to exist.
There are typically two types of bankruptcies available to corporations, Chapter 7 and Chapter 11. Chapter 7 is the liquidation of a company and its assets, usually resulting in the company shutting down. Chapter 11 bankruptcy is the reorganization of debts. The corporate debts are restructured into a repayment plan. In most cases, the business will stay afloat.
Companies who were struggling or who made large expansions before the COVID-19 pandemic seem to be struggling most. The pandemic shook the relatively good economy everyone was used to and had built business models upon. Bankruptcy experts expect to see an increase in consumer and corporate bankruptcies for the remainder of the year and into 2021.
Popular corporations continue to downsize and seek bankruptcy protection to stay afloat during a rocky 2020.
For more information on corporate bankruptcies, visit this blog post: https://hoglundlaw.com/hoglund-law/bankruptcy/business-bankruptcy/2020-brings-bankruptcy-filing-for-popular-retailers/
