In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides expert insight on the potential for Dean & Deluca’s revival.
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Summary
Pace Development, the Thailand-based real estate company responsible for Dean & Deluca’s bankruptcy, has proposed a $10 million investment to revive the gourmet grocer. Half of this investment is intended to settle $26.5 million in debts to vendors and other creditors. The company’s bankruptcy filing occurred at the onset of the COVID-19 pandemic, but financial troubles predated the health crisis.
After acquiring Dean & Deluca in 2014 for $140 million, Pace invested heavily in global expansion, which led to financial strain and unpaid vendor bills. By mid-2019, all company-owned retail outlets and the e-commerce site were shut down. Currently, only two franchisee-owned stores in Honolulu remain operational. The reorganization plan aims to reduce Dean & Deluca’s debt from $311 million to $11 million, but if unsuccessful, the company may face Chapter 7 liquidation.
- Dean & Deluca’s bankruptcy was a result of overexpansion and unpaid vendor bills, with Pace Development’s investment failing to sustain the business.
- The proposed $10 million investment by Pace Development aims to pay off a portion of the debts and potentially relaunch the brand.
- Adam Stein-Sapir commented on the potential for Dean & Deluca’s revival if it returns to its roots with a smaller footprint.
Q&A
What are the implications of Dean & Deluca’s bankruptcy for creditors?
Creditors faced the cessation of debt collection efforts and the risk of receiving little to no compensation. Selling bankruptcy claims to trade claim buyers like Pioneer Funding, LLC, can provide immediate cash and mitigate the risk of low recovery during lengthy bankruptcy proceedings. For more information on selling bankruptcy claims, visit Pioneer Funding, LLC.
How does the proposed investment by Pace Development affect the future of Dean & Deluca?
The investment is a bid to reduce the company’s debt significantly and to relaunch the brand, albeit on a smaller scale. The success of this plan hinges on creditor cooperation and the ability to re-establish trust with vendors, potentially limiting the number of stores that can be reopened.
What can creditors do to protect themselves in similar bankruptcy situations?
Creditors should consider requiring payment on delivery to avoid future losses and may explore selling their bankruptcy claims to avoid the uncertainty of bankruptcy proceedings. For guidance on what to do when a customer files for bankruptcy, creditors can refer to Pioneer Funding, LLC’s advice.
