NRF asks Congress to repeal lease renewal limit
Washington, D.C. The National Retail Federation today asked Congress to repeal a four-year-old law limit on the amount of time in which retailers trying to reorganize under bankruptcy protection must decide whether to keep leases on their stores, saying the requirement can force struggling merchants out of business prematurely.
“As now written, the law limits the bankruptcy court’s discretion to the point that it has become more difficult for retailers to successfully emerge from Chapter 11,” said Mallory Duncan, senior VP and general counsel, NRF.
Prior to 2005, retailers seeking to reorganize under Chapter 11 of the bankruptcy code initially had 60 days to decide whether to take advantage of rules allowing them to cancel their leases early, and bankruptcy judges had discretion to extend the period indefinitely. According to the NRF, the judicial discretion was important because retailers in Chapter 11 typically need a number of months to develop a reorganization plan that includes decisions on which stores are profitable and should be kept, and which to close. They then need a year or more to see whether the remaining stores have been profitable, and whether they need to close additional stores.
Under Congress’s 2005 update of bankruptcy laws, however, landlords successfully lobbied for a 210-day limit, with no judicial discretion to extend the period. Retailers who don’t close a store within the time period are now locked into whatever lease was in effect prior to the bankruptcy, and might have to continue paying a landlord for years on a store they later decide to close. Any decision to let the retailer out of the lease early is up to the landlord, rather than the bankruptcy judge.
Duncan said the limit can force a retailer to close a story early, rather than being able to keep it open long enough to see how it will perform during crucial periods in their annual business cycles, such as the holiday season for clothing stores or perhaps the Super Bowl — a time when electronics retailers such as Circuit City would typically see a spike in television sales. Without flexibility, some companies that might have survived reorganization could be forced to go out of business, he said.
“For a reorganization plan to be realistically vetted, it must be tested during that critical period,” Duncan said. “If at the end of the test period the plan proves successful, underperforming leases are canceled, performing leases are extended, and the retailer emerges from Chapter 11 with its business and often tens of thousands of jobs intact. Landlords, of course, continue to be paid throughout this process. But by greatly shortening the time period and removing the court’s discretion, the new law inadvertently dooms reorganizations to failure.”
Duncan asked that Congress repeal the 210-day limit and return to the earlier 60-day limit with the option for extensions. Short of that, the 210-day limit should be extended to at least one year, he said.
Arnold to retire from Procter & Gamble
CINCINNATI Procter & Gamble announced that Susan Arnold, president of global business units, will retire effective Sept. 1, after 29 years of service. She stepped down as president on March 9 and will continue to serve in a special assignment, reporting to chairman of the board and CEO A.G. Lafley, until Sept.1.
“Susan has been an integral part of P&G’s leadership team over the past decade, most recently as president of global business units responsible for more than $80 billion in sales and more than 300 brands worldwide,” Lafley said.
Most recently, Arnold has played a pivotal role in P&G’s focus on sustainability. Under her leadership, P&G adopted company-wide sustainability goals. Sustainability has been integrated into strategies and plans in every business unit.
Safeway introduces waterfront BISTRO
PLEASANTON, Calif. Safeway has introduced waterfront BISTRO, a line of nearly 30 seafood selections and prepared entrees.
According to Safeway, its exclusive waterfront BISTRO line was created as a convenient, at-home version of a high-quality seafood bistro experience, complete with recipes for creating everything from gourmet dinners to Sunday brunch fare.
“Now more than ever, people are dining at home, so they want to make the best of their ‘dining in’ experience with restaurant quality meals,” said Matt Miller, VP consumer brands. “waterfront BISTRO provides customers with countless combinations and possible ways to stretch the household budget and discover the ease of making elegant seafood dishes, like Sockeye Salmon marinated with a Garlic Lemon Pepper sauce, at home.”
Waterfront BISTRO options range from heat-and-serve to simple preparation. Items like waterfront BISTRO™ Salmon Fillets, Raw Shrimp and Wild Sea Scallops come with easy recipes to do-it-yourself entrees and appetizers. Pre-made entrees, such as Lemon Dijon Pacific Salmon and Tuscan Roasted Pacific Cod, come marinated and are ready in minutes.