A CHRISTMAS supplier to companies like Walmart has filed for Chapter 11 bankruptcy.
The bankruptcy filing comes as many retailers begin to roll out their Christmas promotions.
Gordon Companies Inc., the parent company of several e-commerce Christmas brands, filed a voluntary Chapter 11 request in New York earlier this month.
The parent company’s brands include Christmas Central, Christmas.com, Northlight and Pool Central.
Gordon Companies partners with major retailers, such as Walmart, Amazon, Target, The Home Depot and Kohl’s.
In its bankruptcy filing, Gordon Companies estimated its assets and liabilities at between $10million and $50million with 458 creditors.
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These creditors include UPS, FedEx, Microsoft and Pepsi.
Jeff Sands, Chief Turnaround Officer, said the company expected to transition through the bankruptcy process “efficiently”.
He commented: “Chapter 11 gives Gordon Companies an orderly, court-supervised path to right-size its debt while the business continues to run normally.
How does bankruptcy work?
Bankruptcy is a specific legal process that helps companies eliminate debt they can't repay.
The process allows businesses to start fresh and gain access to new credit.
Supervised by federal courts, bankruptcies allow a company to sell off its assets more easily to pay off creditors, according to Investopedia.
Chapter 11, a common process for companies, is used to restructure a business with the goal of remaining open – even if it means selling off most of the company’s properties.
Chapter 7, on the other hand, sells all of a company’s assets, putting it out of business.
Chapter 15, alternatively, allows for collaboration between American and foreign courts to conduct bankruptcy proceedings with “parties of interest involving more than one country,” per the United States Courts.
“We expect to move through this process efficiently and emerge with a more flexible financial foundation for the next 50 years.”
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With the busy Christmas season approaching, Natalie Martini,
Vice Chair and U.S. Retail and Consumer Products leader of the professional services network Deloitte, says shoppers are looking for value.
Martini comments: “Consumers continue to place importance on making the holidays special for their friends and families, while also making deliberate choices about how they spend.
“As they look to get more out of their dollars, we continue to see
value-seeking behaviors across income levels, including switching among brands and retailers and using promotions to manage spending.”