Century 21 Stores has filed for Chapter 11 and plans to commence a wind down of its off-price retail operations and going out of business sales at its 13 stores across New York, New Jersey, Pennsylvania, and Florida after serving customers for nearly 60 years.
The decision, the company said, follows nonpayment by its insurance providers of approximately $175 million due under policies put in place to protect against losses stemming from business interruption such as that experienced as a direct result of the COVID-19 pandemic.
“While insurance money helped us to rebuild after suffering the devastating impact of 9/11, we now have no viable alternative but to begin the closure of our beloved family business because our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances like we are experiencing today, have turned their backs on us at this most critical time,” said Century 21 co-CEO Raymond Gindi. “While retailers across the board have suffered greatly due to COVID-19, and Century 21 is no exception, we are confident that had we received any meaningful portion of the insurance proceeds, we would have been able to save thousands of jobs and weather the storm, in hopes of another incredible recovery.”
To accomplish an orderly wind down, the company voluntarily filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Concurrently, the company is removing to the Bankruptcy Court a lawsuit pending in the Supreme Court of the State of New York against several of its insurance providers based on their failure to compensate the company for its losses under the policies. The company is requesting that the Bankruptcy Court expedite the adjudication of the suit for the benefit of its stakeholders.
The company said it has filed with the bankruptcy court customary motions seeking authority to commence going out of business sales and uphold its commitments to customers and employees. The company’s lenders have consented to the use of cash collateral which, subject to bankruptcy court approval, will provide the liquidity necessary to support operations through the planned store closures.
Century 21 stores are currently open to serve customers. The company is commencing going out of business sales at all of its locations and on its website.