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As far as bankruptcy filings go, BH S&B Holdings LLC's (once known as Steve & Barry's LLC) Thursday petition may have set a record, and a dubious one at that. Yes, the discount clothing store chain is bankrupt once again, a repeat offender that has entered the ignominy of Chapter 22 (not really part of the federal bankruptcy code, but just a colloquialism for a debtor whose filed for Chapter 11 twice).
But what makes Steve & Barry's second filing so disturbing is just how quickly it went back under. It was only on Aug. 26 -- less than three months ago -- that New York private equity firm Bay Harbour Management LLC purchased it out of bankruptcy court. Not only is Steve & Barry's only 13 weeks removed from being sold, it's only 19 weeks removed from filing its first petition (lodged on July 9, as Steve & Barry's LLC). That makes it the quickest repeat fall into bankruptcy, according to The Deal's Bankruptcy Insider database. The previous record went to High Voltage Engineering Corp., a motor and generator maker that filed its second Chapter 11 petition only 11 months after posting its first (March 1, 2004, and Feb. 8, 2005, respectively). Perhaps the most troubling sign about the filing is the fact that it comes only two weeks after Tweeter Opco LLC, another retailer, filed for its second bankruptcy petition in 16 months, under strikingly similar circumstances. Tweeter first filed under the name Tweeter Home Entertainment Group Inc. on June 11, 2007, and was sold to Schultze Asset Management LLC just a month later. The auto parts industry has seen its share of quickie repeat offenders in the past few years as well, as Citation Corp. (first filed on Sept. 18, 2004, and then again on March 12, 2007) and Intermet Corp. (first filed on Sept. 29, 2004, and then on Aug. 12), among others, have shown. But while Citation was able to restructure its finances twice and Intermet is currently trying to do the same, the retail sector of 2008 has proved less forgiving. Both Steve & Barry's and Tweeter filed specifically to liquidate, making no illusions as to whether or not there would be a future for the two retailers. Could more be on the way? It serves as an ominous sign as Boscov's Inc. prepares for a bankruptcy sale of its own. - Ben Fidler
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