(Photo: Shutterstock)Forever 21 Chapter 11 Brings More Bankruptcy Work to Kirkland & Ellis
The fast-fashion behemoth is the latest retailer to seek bankruptcy protection as brick-and-mortar woes keep Kirkland and other law firms busy.
September 30, 2019 at 12:18 PM
2 minute read
After months of speculation and ramped-up news reports in recent weeks, Forever 21 finally filed for bankruptcy protection Sunday.
The retailer, a shopping-mall staple synonymous with "fast fashion" that offers affordable versions of more expensive trends, filed for Chapter 11 protection in Delaware on Sunday night, signaling the struggle of brick-and-mortar retail will likely continue as rents soar and online shopping increases competition.
Kirkland & Ellis will lead Forever 21′s restructuring efforts and manage its estimated $1 billion to $10 billion in liabilities. The company is only the latest addition to Kirkland's roster of high-profile bankruptcy clients in the retail sector: Earlier in the year the firm reaped more than $56 million in judge-approved fees for its work on Toys R Us' bankruptcy, and Kirkland is also representing luxury retailer Barneys, which filed for Chapter 11 last month.
In an interview with The New York Times, which was first to report Sunday night's filing, Forever 21′s chief restructuring officer said the retailer did not pay rent on its stores in September and plans to renegotiate lease agreements and close up to 178 stores in the U.S., while shuttering operations in 40 countries.
Senior lender JPMorgan Chase, represented in the bankruptcy by Morgan, Lewis & Bockius, has committed $275 million in financing for Forever 21, while TPG Sixth Street Partners has put up an additional $75 million in new capital.
No law firms were listed among the company's 50 largest unsecured creditors, which appeared to be mainly Chinese, South Korean or other Asian-based companies.
Pachulski Stang Ziehl & Jones will provide local counsel.
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