Slip and fall claims are falling along with the shopper’s feet that beat a path to retailer’s doors. Retail panel counsel members are sure to notice the shrinkage in claim levels.
As e-commerce growth is accelerated by a surge of COVID-19 work-from-home buyers, dozens of traditional brick-and-mortar retailers are filing for bankruptcy in 2020.
The form of bankruptcy filed (see below) determines whether a retailer plans to shutter all locations through liquidation, or alternatively seeks to reduce expenses by closing lower performing stores and renegotiating debt obligations.
Pier 1 Imports, for example, announced in January 2020 that it planned to close up to 450 stores, or nearly half of its locations before filing for Chapter 11 bankruptcy protection in February. It later announced plans to close all locations and started a liquidation sale May 22.
Department store chain J.C. Penney is expected to permanently close 242 stores. It plans to continue operating approximately 600 stores and did obtain some rent relief as part of its effort to avoid liquidation.
Retail Panel Counsel Implications
Retail panel counsel law firms that derive a significant portion of their billable hours from retail clients will want to immediately begin efforts to diversify their client base (see below).
Here are some basic insurance defense marketing steps that retail panel counsel members can take to start seeking new defense clients:
- Make sure your website is attractive and up-to-date. A law firm website is the foundation for any type of marketing effort. Pay special attention to attorney bio pages, which are the most heavily trafficked pages on a law firm’s website.
- Pick up the pace on LinkedIn marketing, both at the attorney and the law firm levels. Start a company page, build your connections, and get more active in posting news items.
- Have a “firm resume” ready to make pitches to more litigation panel members. This is generally a 10-page PDF document that introduces the law firm, its practice areas, and attorneys.
- Start an e-newsletter to clients and prospects. This is very effective for client retention and works well to stay “top of mind” with your current revenue sources.
We recommend an “ABC” approach to panel counsel business development … “Always be Communicating!”
National Retailer Brands Seek Bankruptcy Court Protection
Even the most iconic brand names in retail history could not escape massive changes in consumer purchasing patterns driven by e-commerce growth and fueled by the coronavirus pandemic. Nationally known retailers that filed for bankruptcy in 2020 as of early August include:
- Ascena Retail Group Inc. (Ann Taylor, Lane Bryant), July 23
- Brooks Brothers Group Inc., July 8
- GNC Holdings, Inc., June 23
- J.C. Penney Co. Inc., May 15
- Le Tote Inc. (Lord & Taylor), August 3
- Neiman Marcus Group Ltd. LLC, May 7
- Pier 1 Imports Inc., February 17
- Tailored Brands Inc. (Men’s Wearhouse, Jos. A. Bank), August 2
Dozens of smaller and regional retailers also filed for bankruptcy in 2020 as of early August, including:
- Armadio Inc., January 15
- Art Van Furniture Inc., March 8
- BHS Foodservice Solutions, June 26
- Bluestem Brands Inc., March 9
- Castella Imports Inc., April 13
- CD II Fashions LLC, May 4
- Centric Brands Inc., May 18
- CHIEF Corp., March 20
- Chinos Holdings Inc., May 4
- Donghia Inc., March 30
- Fairn & Swanson Inc., June 2
- Generation Zero Group Inc., March 13
- Hilburn Inc., April 30
- John Varvatos Enterprises Inc., May 6
- Libbey Glass Inc., June 1
- Liftopia Inc., June 2
- Lucky Brand LLC, July 3
- Modell’s Sporting Goods Inc., March 11
- Muji U.S.A. Ltd., July 10
- Must Cure Obesity Co., January 31
- N B L Textiles Inc., April 24
- Occasion Brands LLC, July 22
- Old Time Pottery Inc., June 28
- Paddle8 Inc., March 16
- Paper Store Inc., July 14
- RTS USA Corp., April 29
- RTW Retailwinds Inc. (New York & Co.), July 13
- Rubie’s Costume Co. Inc., April 30
- Schurman Retail Group (Papyrus Stores, Paper Destiny, American Greetings/Carlton Card), January 21
- SFP Franchise Corp., January 23
- Stage Stores Inc., (Bealls, Peebles, Goody’s, Gordmans Stores, and Palais Royal), May 10
- Sur La Table, July 8
- True Religion Apparel Inc., April 13
- Tuesday Morning Corp., May 27
- Worth Collection Ltd., February 14
Forms of Retail Bankruptcy
Most retailers file a Chapter 11 bankruptcy, which gives the company a court-supervised restructuring process to strengthen its balance sheet. During this time of the COVID-19 pandemic, filers also get more time to navigate the effects of the coronavirus so they can better position the company for the future.
Chapter 7 under the U.S. Bankruptcy Code provides for “liquidation,” which involves the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.
A corporation or partnership may not be a chapter 13 debtor. 11 U.S.C. § 109(e). Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual’s unsecured debts are less than $394,725 and secured debts are less than $1,184,200. Id.
Insurance Defense Marketing Consultant for Law Firms
Retail panel counsel members that want to attract new clients are encouraged to call Margaret Grisdela (866-417-7025) at Legal Expert Connections, Inc. for a free marketing consultation. We have helped more than 180 insurance defense law firms in 39 states pursue new client opportunities.
Legal Expert Connections, Inc. offers three key benefits to insurance defense law firms nationwide:
- We are the leading U.S. legal marketing agency specializing in the insurance defense market. We make it our business to identify who you need to contact at an insurance company, corporation or municipality to be considered as a panel counsel member. We accelerate your business development process by helping you focus on introducing your law firm to new prospective clients.
- You get a structured business development process. We guide your law firm through a proven three-step campaign that brings discipline, focus, and productivity to your marketing efforts.
- Increase revenue with professional, Bar-compliant legal marketing campaigns. We do the research to identify insurance panel managers, so you can focus your time on the business development process.
This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. The article should not be used as a substitute for legal advice from a licensed attorney in your state. Every situation is different and circumstances vary widely depending on the governing state law, policy provisions, and related considerations.