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Companies getting bankrupt, a new normal in age of COVID-19

With the global economy thrashed by the ongoing pandemic, countless companies are now treading the waters of near-insolvency. And, just like with people, the companies most vulnerable to the coronavirus seem to be those with underlying conditions. As debt levels rise and the sharks of bankruptcy circle, the first casualties have been businesses with preexisting health issues.

Companies that have filed for  bankruptcy include:

J.Crew Group:

 The parent of classic clothing brand J.Crew, purveyor of sweater vests, chinos, and Michelle Obama’s dresses, is the first major retailer to seek bankruptcy protection in the U.S. According to its May 4 filing, the group—which runs both J.Crew and Madewell—will convert $1.65 billion of its debt into equity with lenders and has secured $400 million in “debtor-in-possession” financing, which lets companies stay operational while undergoing bankruptcy. It expects to reopen 181 J.Crew stores, 171 J.Crew factory stores, and 140 Madewell stores after coronavirus restrictions are lifted.

Gold’s Gym:

The fitness center chain, which started in Venice Beach, California, and has gained a cult following in the bodybuilding community, filed for bankruptcy on May 4. The company closed its empire of roughly 700 gyms during the coronavirus pandemic, 30 of which will remain closed after the bankruptcy. It will continue to reopen the rest of its gyms throughout the process, depending on federal, state, and local guidelines.

Dean & Deluca:

 The luxury grocer, which in its heyday sold $225 tins of Imperial caviar and a $135 nut sampler, was already dangling by a thread heading into 2020, as it shuttered its founding, flagship store in Soho, New York, in October. Its April filing, which cited the coronavirus pandemic as a final straw, listed only one employee and $500 million in liabilities against $50 million in assets. However, it still hopes reopen Dean & Deluca locations in New York in the near future.

True Religion:

The designer jeans company—once at the pinnacle of pop culture, donned by celebrities in music and film—filed in April for the second time in three years. While the brand was already navigating a descent into the uncool as denim gave way to athleisure, government-ordered shutdowns of brick-and-mortar stores due to the coronavirus pandemic sent the company into bankruptcy territory once again.

Speedcast International:

The Australian satellite internet company, whose global maritime network serves 80% of cruise ships around the world, filed in April, in the Southern District of Texas, where it has offices. The company cited weakness in the cruise market as the pandemic has curbed recreation and leisure travel, which compounded the company’s $600-odd million in old debt, rendering it “impossible” to grab equity lifelines. The company will restructure, backed by $90 million in debtor-in-possession financing.


Flybe, the British airline that provided more than half of U.K. domestic flights outside of London, entered administration, the U.K. equivalent of bankruptcy proceedings, on March 5. Many of Flybe’s flights had been canceled as Europe—which was quickly becoming the epicenter of the coronavirus pandemic—locked down countries one after another, and the company’s $128 million (100 million British pounds) aid request was denied by the U.K. government. The airline, which has struggled since its 2010 IPO, remains in limbo as all its flights are grounded indefinitely.

Virgin Australia:

 In April, Richard Branson’s airline became the world’s largest carrier to seek bankruptcy protection through voluntary administration in Australia, despite its billionaire founder’s offer of his Caribbean island estate as collateral for funding. The company’s plea for a $903 million (1.4 billion Australian dollars) loan from the Australian government was also denied. Prior to the coronavirus pandemic, Virgin Australia had not posted a profit in seven years, although potential buyers believe it can survive with restructuring.

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