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Unpaid vendors demand compensation as Sears declares bankruptcy

When a company is facing an uncertain financial future, they have a couple of options to consider in revitalizing their structure and recovering from the restraints of debt. Struggling companies in New Jersey may be able to develop a plan for consolidating their debt, renegotiate contracts with creditors to extend their payment period or file for bankruptcy to try and recover as many of their assets as possible. 

In a story that has taken the nation by storm, the once popular retail giant Sears has recently announced its decision to file for Chapter 11 bankruptcy protection. While their decision does not come as a surprise to some, it has still led many to question the brand's leadership in years past that ultimately led it to its demise. Recent reports detail how the company's supply chain is falling apart as more vendors express their dissatisfaction with not receiving the payment they were promised in exchange for product shipments. 

The current plan is to use funds that come from bankruptcy financing to try to amend some of their mounting debt and to use the rest of the money to operate the company and keep a number of its stores open. Debt owed to freight companies who deliver product to Sears is at a soaring $16.7 million. The future of the retail giant is unknown, but unless things are turned around with the help of bankruptcy protection initiatives, the company may have to close its doors for good. 

If companies are struggling to stay afloat and have decided that bankruptcy is their only viable solution, they may wish to hire an attorney to help them. Doing so may provide them with guidance as they work to develop a plan to recover as many of their assets as possible while paying off outstanding debts. 

Source: The Wall Street Journal, "Sears Seeks to Repair Fraying Supply Chain in Bankruptcy," Jennifer Smith, Oct. 15, 2018

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