In this article, Adam Stein-Sapir of Pioneer Funding, LLC, provides insight into the challenges facing Dressbarn’s intellectual property sale.
Article Link: https://nypost.com/2019/08/26/dressbarn-and-ann-taylor-owner-not-returning-lenders-calls/
Summary
Ascena Retail Group, the parent company of Dressbarn, Ann Taylor, and other brands, is causing concern among its lenders due to unresponsiveness, raising fears of a potential bankruptcy. Despite not missing any payments, Ascena’s silence has left lenders anxious, especially as the company proceeds with closing Dressbarn stores and faces significant lease obligations. The situation is compounded by the fact that lenders have not received expected proceeds from the sale of a majority stake in Ascena’s discount chain, Maurices. Ascena’s declining stock value and the hiring of legal counsel by lenders suggest preparations for a possible bankruptcy scenario, which could involve either Dressbarn or the entire Ascena group.
- Ascena Retail Group’s lack of communication with lenders over a $1.4 billion debt raises bankruptcy concerns.
- Lenders have not received proceeds from the sale of Maurices, and Ascena’s stock continues to fall.
- Adam Stein-Sapir comments on the difficulty of selling Dressbarn’s intellectual property due to its declining brand value.
Q&A
What are the implications of a company not responding to its lenders?
When a company like Ascena Retail Group does not respond to its lenders, it can signal financial distress and raise concerns about the company’s ability to meet its debt obligations. This behavior can lead to speculation about a potential bankruptcy filing, which may be a strategic move to restructure debt and obligations. For more information on how companies deal with bankruptcy, visit Pioneer Funding LLC’s guide on what to do when a customer files for bankruptcy.
How does the sale of a company’s intellectual property factor into bankruptcy proceedings?
The sale of intellectual property (IP) can be a crucial aspect of bankruptcy proceedings as it may provide a source of funds to pay creditors. However, the value of the IP can be significantly affected by the brand’s market perception. In the case of Dressbarn, Adam Stein-Sapir notes that the brand is considered weak, which could make the IP less attractive to potential buyers, complicating the bankruptcy process. For insights into selling bankruptcy claims, Pioneer Funding LLC offers a detailed guide.
What role do trade claim buyers play in the context of bankruptcy?
Trade claim buyers, like Pioneer Funding, LLC, provide an option for creditors to sell their bankruptcy claims for immediate cash, rather than waiting for the outcome of bankruptcy proceedings, which can be lengthy and uncertain. This can be particularly appealing in cases where the recovery rate for unsecured creditors is projected to be low, as it was with Dean & DeLuca’s bankruptcy. For more information on the risks and benefits of selling bankruptcy claims, Pioneer Funding LLC’s website offers valuable resources.
