Contributing Factors That Continue To Drive Business Bankruptcy Filings Due To COVID-19
Over the course of 2020, the situation surrounding COVID-19 took a heavy toll. In addition to potentially life-threatening health impacts, widespread lockdowns, mask mandates, and social distancing all had dramatic effects on us individually and on businesses. While the situation has improved since then, there are still concerns about high case counts. There also continue to be lingering problems that have led many companies to consider filing a business bankruptcy. Find out some of the contributing factors involved.
Big Businesses Impacted By The COVID-19 Pandemic
In late 2020, Forbes reported on some of the major companies in the United States who ended up filing for business bankruptcy as a result of the COVID-19 pandemic. With lockdowns preventing stores from opening and a dramatic increase in online ordering, brick and mortar retailers were among the hardest hit. Those who sought protection through bankruptcy proceedings include:
- Brooks Brothers;
- Lane Bryant;
- Lucky Brand;
- A. Bank;
- Men’s Wearhouse;
- Neiman Marcus;
- Tailored Brands;
- True Religion (the parent company of Ann Taylor).
Unfortunately, each represents thousands of lost jobs for manufacturers, equipment suppliers, shipping companies, and other businesses involved. Despite pushing online and to-go ordering, the restaurant industry was hit hard as well. Bravo and Brio, the largest franchisee with thousands of Pizza Hut and Wendy’s locations, filed for bankruptcy as did California Pizza Kitchen, Chuck E. Cheese, Friendly’s, Domino’s Pizza, Papa Johns, Ruby Tuesday, Sizzler, and a host of other establishments. Such heavy losses have a ripple effect, impacting small business owners as well.
Pandemic-Related Impacts Among Smaller Business Owners
COVID-19 vaccinations led to an easing of prior pandemic restrictions over the summer and provided a boon for struggling businesses, but the Delta variant remains a serious concern. According to an August 3, 2021 New York Times news report, case counts are once again rising to the point that many areas are considering reinstating mask mandates. This is bad news for small business owners, who continue to struggle with pandemic-related impacts. Many are likely to find themselves considering business bankruptcy. Common contributing factors include:
- General downward trends in business as customers and clients struggle with job losses;
- Reduced demand for certain products and services as people voluntarily stay home more;
- An inability to get caught up on past debts from 2020, when the pandemic was at its height;
- Worker shortages, causing businesses to reduce their hours and productivity.
Contact an Attorney Today for Help
Is your business continuing to struggle due to pandemic-related impacts? Business bankruptcy can help eliminate certain types of debts while renegotiating payments on others. It can also prevent harassing credit collection calls and legal actions, such as repossessions and lawsuits.
At the Law Office of Harry D. Lewis, we can review the circumstances surrounding your specific case and outline options in regards to filing a business bankruptcy. Reach out and call or contact our New York City business bankruptcy attorneys online to request a free consultation today.