Retail Bankruptcies: Key Issues for Debtors, Landlords and Vendors

Assumption and Rejection of Leases; Treatment of Gift Cards, Consignment Rights and Going out of Business Sales

Recording of a 90-minute CLE webinar with Q&A

Conducted on Thursday, June 15, 2017

Recorded event now available

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Program Materials

This CLE webinar will provide bankruptcy and other counsel with the tools to navigate common issues that arise during retail bankruptcy cases. The panel will discuss assumption and rejection of leases, gift cards, vendor rights, going out of business sales, and other issues particular to retail bankruptcies.


National and regional retailers are filing for bankruptcy protection at the highest rate since the recent recession, with at least nine filings in the first quarter of 2017. According to Moody’s rating agency, another 19 store chains face possible bankruptcy by year end. This reflects a continuing decline in brick and mortar retail, due in part to a consumer shift to online shopping.

A troubled retailer must carefully consider the issues it may face should it determine to file for bankruptcy. For example, the retailer has just 210 days to decide which leases to accept or reject, and lenders often require retail debtors to propose a reorganization plan within 90 to 120 days after filing or face liquidation of the business. Moreover, the retailer must decide whether to continue to honor gift cards and other customer incentives post-petition. Consignment arrangements--where a vendor has delivered goods to a buyer/consignee but retains title to those goods pending sale to a third party--must also be considered. Additionally, vendors may assert that their claims are entitled to priority under section 503(b)(9) of the Bankruptcy Code.

Finally, the "going out of business" (GOB) sale is a frequently used mechanism in retail bankruptcies to maximize the value of inventory located at a retailer's unprofitable locations. GOB sales, however, are subject to various restrictions, both in and outside of bankruptcy, that are essential for a retailer to understand before utilizing this strategy.

Listen as our authoritative panel discusses the difficulty of navigating a retailer through a bankruptcy proceeding in the current retail climate.



  1. The recent surge in retail bankruptcies
  2. Assumption and rejection of Leases—treatment of rent pre- and post-petition
  3. Gift cards
  4. Vendors—consignment, stay relief and other issues
  5. Inventory—going out of business sales


The panel will review these and other key issues:

  • What is the procedure and timing for assuming or rejecting leases in bankruptcy?
  • What steps may vendors take to protect their rights to consigned goods?
  • What are some of the constraints on GOB sales, and how are they resolved in bankruptcy?


Felice R. Yudkin
Felice R. Yudkin

Cole Schotz

Ms. Yudkin is a member in the firm’s Bankruptcy & Corporate Restructuring Department. She counsels...  |  Read More

George M. Cheever
George M. Cheever

Of Counsel
K&L Gates

Mr. Cheever represents debtors, lenders, trade suppliers, landlords, and other creditors, purchasers of assets of...  |  Read More

Jacob S. Frumkin, Esq.
Jacob S. Frumkin, Esq.

Cole Schotz

Mr. Frumkin is part of his firm’s Bankruptcy & Corporate Restructuring team. He represents debtors,...  |  Read More

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