Today, Claire’s Stores, Inc., along with seven affiliates and subsidiaries filed for Chapter 11 bankruptcy protection in the Delaware (Case No. 18-10584). Claire’s is a well-known specialty retailer of teen and young women jewelry, accessories, and beauty products, as well as ear piercings at local malls, based in Cook County, Illinois.
Back in January 2018, I included them on my list of Retailers to Watch for a Bankruptcy Filing in 2018.
According to Court pleadings, the company negotiated a restructuring support agreement and plan term sheet with an ad hoc group of its first lien noteholders and is seeking approval of up to $135 million in DIP financing.
The company lists 92 stores to close, on top of the 100 that it closed last year. Still, Claire’s indicates that it intends to operate the remaining 1,600 Claire’s and Icing brand stores through a restructuring.
Many landlords were not paid March rents; a tactic that debtors like Claire’s used to avoid paying rent during the early stages of a bankruptcy proceeding. Under the Bankruptcy Code, the retailer would have to pay April rent to stores it is operating.
If you are a landlord with a Claire’s or Icing store, it is important to know your rights, now. Stark & Stark’s Shopping Center & Retail Development Group can help. Our bankruptcy attorneys regularly represent landlords throughout the country, including recently in the District of Delaware, Eastern District of Missouri, District of New Jersey, Southern District of New York, District of Minnesota and Eastern District of Pennsylvania on a variety of issues. Most recently, our Shopping Center Group has represented landlords and trade creditors in the Charming Charlie, Toys R Us, Macaroni Grille, Joe’s Crab Shack, Payless, Eastern Outfitters (EMS Part 2), EMS, Golfsmith, RadioShack, General Wireless (RadioShack Part 2), Gander Mountain, and A&P, Chapter 11 bankruptcy cases.
For more information on how Stark & Stark can assist you, please contact Thomas Onder, Shareholder at (609) 219-7458 or tonder@stark-stark.com. Mr. Onder writes regularly on commercial real estate issues and is an active member of ICSC and Chair of the ICSC PA/NJ/DE Conference and Deal Making Show for 2018 in Philadelphia this September.
