Updating a story we brought you earlier this year, the Wall Street Journal reported last week that Brookstone Holdings Corp. was granted approval by a federal judge to continue operating the majority of its stores after the company exits bankruptcy.
The stores are currently pending a sale to Sailing Innovation US Inc., and U.S. Bankruptcy Court Judge Brendan Shannon in Wilmington, Delaware approved a bankruptcy-exit plan on June 23.
The plan details how Brookstone intends to pay off $51 million in bank loans with a loan provided by bondholders funding the restructuring. Sailing Innovation agreed to buy Brookstone on June 2 at an auction for $174 million.
Brookstone entered into Chapter 11 bankruptcy in April. In addition to paying off bank loans, the retailer will have to work out deals with property owners where its stores are located. Brookstone, based in Merrimack, New Hampshire, said in its bankruptcy filing that it had up to 5,000 creditors.
In its filing, Brookstone reported that it had liabilities as high as $500 million and just $1 million when earnings were reported.
Brookstone originally planned to sell itself to Spencer Spirit Holdings, which was outbid at an auction. The new owners plan to keep open most of Brookstone’s existing stores and expand the retailer’s brand into the U.K. and China, the Journal reported.
Originally, a catalog retailer, Brookstone is well known for selling massage chairs, travel gadgets and other novelty items.
Can I Enter into a Bankruptcy Repayment Plan?
Much like a business bankruptcy filing, individuals looking to file for bankruptcy have options in Chapter 13 and Chapter 7 filings, which stop collections, foreclosures and can restructure debt.
Through a Chapter 7 bankruptcy, a debtor can discharge unsecured debt, like credit card debt or medical bills. Additionally, a Chapter 13 bankruptcy is an excellent option for individuals who have a certain income level, but have fallen behind in payments, as you can enter into a repayment plan to stop the threat of repossessions.
It should also be noted that there is flexibility in Chapter 13 cases, as it allows for modifications to repayment plans should an event such as a job loss, wage cut or catastrophic injury affect your income.
If you have questions about entering into a repayment plan with your creditors, contact our Washington DC and Maryland bankruptcy lawyer now for a free consultation.
Law Firm of Kevin D. Judd – Maryland and Washington DC bankruptcy attorney
Judd’s Judgment: A Chapter 13 bankruptcy requires that a person make payments to a trustee, who then distributes the compensation to creditors.