Earlier this week, clothing retailer Lord & Taylor and fashion rental subscription service Le Tote filed for Chapter 11 bankruptcy protection in the Richmond Division of the United States Bankruptcy Court for the Eastern District of Virginia. Following J.Crew and Ann Taylor, this is the third major retail filing in Richmond since the COVID-19 pandemic forced brick-and-mortar stores to close. The Honorable Keith L. Phillips will preside over the bankruptcy proceedings.
Lord & Taylor and Le Tote have entered into an agreement with their secured lenders to market their brands and certain proprietary technology. Under milestones established by the secured lenders, the sale of Le Tote assets must occur by October 5. Likewise, the deadline for the sale of Lord & Taylor assets is October 20. The debtors have proposed bidding procedures that require interested parties to qualify and submit proposals in advance of these deadlines. In the meantime, Lord & Taylor plans to close all 38 retail locations and has entered into an agreement Hilco Merchant Resources and Gordon Brothers Retail Partners to conduct store closing sales.
Lord & Taylor and Le Tote rely on an integrated supply chain to offer more than 150 brands of clothing for rental or sale. In the months leading up to the bankruptcy filing, both retailers decided to suspend many of their vendor payments. The debtors have received interim authority to make limited payments to some vendors. Most vendors, however, will need to take action to maximize their share of any distributions from the proposed Chapter 11 Plan.
The next hearing in these cases is scheduled for August 27 at 11:00 a.m. ET. If you have questions or needs regarding these bankruptcy proceedings, please contact a member of our Bankruptcy Team: