As for landlords and trade creditors, they should:
- 1. Document monies owed and track payments, status of deposits, product return, timing of product sales and deliveries, etc. If a deposit is applied before the bankruptcy filing, it is a different story than if the landlord is holding deposit funds and is owed monies at the moment of the bankruptcy filing. Also, as trade creditors often can reclaim delivered but unpaid-for inventory, having documentation on this is important.
- 2. As the contracts/purchase orders/invoices will govern how
Rite Aid's debts are handled in the bankruptcy, having the fully executed contract available and reviewing it now will put landlords and trade creditors ahead of the bankruptcy filing. And, ifRite Aid decides to continue operating, certain trade creditors may be designated critical vendors and receive up-front consideration to continue providing product or services. Those vendors and landlords may be able to demand and receive sums due pre-petition, as well as attorneys fees and costs. Those trade creditors and landlords may be able to (or requested to) renegotiate certain terms of their contracts going forward.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Ms
Epps & Coulson
Suite 1020
CA 90071
URL: www.eppscoulson.com
© Mondaq Ltd, 2024 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com, source