Friday, May 2, 2008

Linens & Things finally pulls the Chapter 11 trigger

It was really a matter of when, not if, right? 20% of the stores are closing, they have DIP financing and may even be able to pay some creditors.

Four stores are closing in Chicago: three in the north/northwest 'burbs (Palatine, Schaumburg and Skokie) and the Michigan Avenue store at 600 N., a location that commands high rents. What typically happens in a Chapter 11 is that the leases get rejected by the debtor, leaving the landlord out of luck.

This probably won't be the last BK, even if the economy picks up. The question now is who is next.