In an article published Jan. 12, 2018 in the Mid-Atlantic Real Estate Journal, Kristen Burgers and a co-author discuss why large retail corporations choose to file for bankruptcy in Richmond over other jurisdictions. They explain that the Richmond bankruptcy court’s practicality and astute understanding of Chapter 11 practice makes the city appealing to retailers. Time is money, especially in bankruptcy, they state, “The longer a case lingers in bankruptcy, the higher the professional fees and the lower the chances of a successful reorganization. In Richmond, large bankruptcy cases typically move along at the pace requested by the parties, including any expedited hearings that may be necessary.” The attorneys also discuss the level of certainty, flexibility and breathing room Richmond offers constituents, highlighting the Circuit City bankruptcy case. “The court issued a seminal decision interpreting provisions of the Bankruptcy Code to provide for the payment of post-bankruptcy rent on the effective date of a plan of reorganization – not sooner. This frees up substantial liquidity during the pendency of a Chapter 11 case (funds that can be used for ongoing operating needs),” they explain. “For a large retailer, it provides sufficient time to determine the viability of a location and / or to re-negotiate a longer term-arrangement with a landlord – a significant advantage that might not be available in other jurisdictions.” You may access the full article here.
Myrna H. Rooks