Pocono News Section

Boscov's Bankruptcy: What is Chapter 11?

Boscov's Bankruptcy: What is Chapter 11? - Monday, August 4, 2008 at 6:11PM EST

? Reported by: Jeff Chirico
Monday, Aug 4, 2008 @ 06:11pm EST
SCRANTON, LACKAWANNA COUNTY --Boscov's attorneys will file pounds of paperwork this week that show how the company will reorganize. And by the time the chain emerges from bankruptcy, Boscov's may or may not close more stores.

The news the downtown store is staying open, sits well with Scranton shoppers.

Tracy Vargas Scranton "A lot of people look forward to going to Mall at Steamtown and shop at Boscov's. I know I look forward to it."

But the bankruptcy isn't surprising to some. Anna Yaklic Clarks Summit "It’s a reflection of today's economy and the downward spiral we're in." I

n fact last month, the Mall at Steamtown's other big store Steve and Barry's filed the same protection.

Sean Carpenter Scranton "I'm pretty sure they can still run business while filing chapter 11."

That's true according to bankruptcy attorney John Doran. He's not involved with the case but says chapter 11 lets a struggling company get relief.

John Doran: "It takes the pressure of creditors off your back and gives you a chance to talk the real financial problems you have to cope with."

Court papers reveal Boscov's has more than ten thousand unsecured creditors and close to a half billion dollars in debt.

Doran says refinancing and reorganization will be key to Boscov's survival. But that means more stores could close. "It could be a combination of sell some, close some, sell all, keep them all, refinance them all. That's within their pervue.

Boscov's blames rising costs of food and fuel for slow sales. One factor in how and if Boscov's can emerge from bankruptcy. "Will they be successful in the 11? They have the talent in lawyers that's it's highly likely they'll have a plan in the end."

Doran says the attorneys Boscov's has hired are from the same law firm Macy's used to reorganize several years ago.