Exiting In Troubled Times
Fashion Frameworks held a new webinar concerning COVID19 concerns in the fashion industry, today’s session touched on the eco-system of fashion law by fashion lawyer, Douglas Hand, addressing crisis management in peril situations, as well as small business retailers and brands dealing with COVID19 ravaging their businesses leading to closure.
Douglas’s main focus on COVID19 fashion law are brands and retailers losing business for one thing, but going through the murky and “The Twilight Zone” waters of filing for bankruptcy, the fast-moving process of liquidation, and how to deal with creditors and accounts payable/ receivables.
Douglas also addressed the difference between Chapter 11 bankruptcy and Chapter 7 bankruptcy, Chapter 11 allows you to stay open while the bankruptcy proceedings take place, but every sale and accounts receivable go to creditors, even if it’s just pennies or cents on the dollar, Douglas sees J.C. Penney and Macy’s going through bankruptcy due to this pandemic.
Chapter 7 is closing the doors outright without notice, fire sale on everything on the sidewalk once products and fixtures are cleared from the space, not paying rent or debtors, and settling out of court all that’s left after the dust has settled.
Those brands and retailers are fortunate for now to stay in business have the Paycheck Protection Program to pay their employees, and not furlough or lay them off, there’s also the option of becoming an essential business to help in the fight against COVID19.