Stephen Selbst | Source | Co-Chair of the Restructuring & Finance Litigation Group at Herrick, Feinstein

Most debtors at least enter Chapter 11 with the idea of selling their business, or being able to reorganize, where they would drop their unprofitable locations and reorganize around profitable locations. But often, pre-bankruptcy lenders will push for a sale of the company or a sale in pieces.

There’s a risk that they won’t be paid in full, which gives them the most negotiating leverage. That’s a common pattern that we see in a lot of retail bankruptcies.