Background on the Debtors
The iconic retail brand, Brooks Brothers, filed for Chapter 11 bankruptcy protection on Wednesday, July 8, 2020 in the Delaware Bankruptcy Court.
Founded in 1818, Brooks Brothers is one of the country’s oldest retailers. In light of the coronavirus, rent had become a significant burden for the retailer. To date, Brooks Brothers has closed or is in the process of closing 51 of its retail locations. More store closures could be on the way following the bankruptcy filing.
Objectives in Bankruptcy
According to the first day declaration of Stephen Marotta (“Declaration”), the Chief Restructuring Officer of the Debtors, filed in support of the debtors’ first day motions, Brooks Brothers seeks to sell its assets through a court-approved sale. The company had been exploring a sale as early as 2019 but was unable to do so. As a result of COVID-19, Brooks Brothers was required to temporarily close nearly all of its stores worldwide.
According to the Declaration, Brooks Brothers has secured $75 million in debtor-in-possession loans to finance its operations during the bankruptcy and sale process. The company plans to complete a sale within the next few months, pending approval by the court.
Bankruptcy Case Information
The “first day” hearing was held on July 10th, and the “second day” hearing is scheduled for August 3rd, at which time the Debtors will seek final approval of various first day motions that were filed contemporaneously with the bankruptcy petition.
The cases are pending before the Honorable Christopher S. Sontchi and are jointly administered under Case No. 20-11785, under lead debtor Brooks Brothers Group, Inc. The law firm of Richards, Layton & Finger represents the debtors.