The beloved retail chain Christmas Tree Shops is headed for liquidation, according to a recent news report. The chain had entered into a Chapter 11 bankruptcy and had planned on selling off a small number of stores that were not doing well. However, the chain defaulted on its $45 million bankruptcy loan and has since announced plans to liquidate all of its stores.

The announcement marks the conversion of the chain’s Chapter 11 bankruptcy into a Chapter 7 bankruptcy. Chapter 7 bankruptcy works much the same way for companies as it does for individuals. When a company files for Chapter 11, the debt is reorganized in a way that allows the debtor company to repay its debts on a more manageable timeline. Some of its assets are liquidated to repay creditors, but not all of them.

When a company files for Chapter 7, the company is dissolved. All of its assets are liquidated to repay creditors, and once the process is complete, the company no longer exists. 

The announcement marks the closure of 70 stores across the U.S.

Christmas Tree Shops currently has more than 70 stores across the U.S., and “going out of business sales” could start immediately now that the announcement has been made that the company is headed into Chapter 7. A bankruptcy attorney representing the company announced that Christmas Tree Shops had neither the time nor the money to follow through with the Chapter 11 plan.

Chapter 11 bankruptcies work the same way for companies as they do for individuals. However, individuals can also file under Chapter 13, which is a reorganization plan specifically tailored to individuals as opposed to companies. In the rare case that a debtor owes too much money to file under Chapter 13 and makes too much money to file under Chapter 7, the debtor would be forced to file under Chapter 11.

Christmas Tree Shops began as a seasonal business that offered one-of-a-kind Christmas-related items. The company was largely founded in the Northeastern part of the United States. Over time, they diversified their retail offerings to include more items than just seasonal holiday or Christmas-related wares. Headed into bankruptcy, the company had intended to rebrand itself as CTS to indicate that it sells other types of products rather than only Christmas decorations. 

The announcement will put several workers out of work which could lead to personal bankruptcies. The bankruptcy of one company can sometimes create a chain reaction that results in personal bankruptcies for individuals who no longer have a secure source of income to rely upon. 

Talk to an Indiana Bankruptcy Attorney Today

Chris Arrington helps Indiana residents who are saddled with mounting debt to discharge their debts in bankruptcy. Those who have recently lost a job and are not sure they will be able to pay their debts can potentially stabilize their finances with the help of a bankruptcy attorney. Call our office today to schedule a free consultation, and we can go over your options right away.