A case from the archives but still as relevant as ever:
Kmart. Macy’s. Bloomingdale’s. All have done time in bankruptcy court, where a judge’s signature can wipe away millions of dollars in bad business decisions, leaving banks, investors and creditors with a few cents on the dollar.
It was the final days of business for Workbench, an upscale furniture store with headquarters in Bayonne, NJ and franchise locations nationally when the New York Times profiled its demise. As Kenneth Peskin, the current CEO, resigned from the company a federally-appointed trustee stepped in – Mr. Charles Forman.
Michael Holt, law partner of the court-appointed trustee, Charles Forman, said Mr. Peskin’s resignation as well as a dispute over the value of the remaining merchandise were among the reasons the federal trustee stepped in.
Dissolving the company was a matter of dealing with International creditors, liquidating merchandise and dealing with the customers who had paid deposits but not yet received their ordered goods. And therein lies the dilemma: customers put down deposits, merchandise had value, so who makes amends and how?