Century 21 has filed for Chapter 11 bankruptcy and announced the permanent closure of 13 stores.
Century 21 has filed for Chapter 11 bankruptcy following the attacks in 9/11 and announced that 13 stores, including the lower flagships of Manhattan, would be permanently shut down.
- In a statement, Century 21 said that it had no option but to shut down.
- Gindi, says that the insurers “turned their backs on us at the most important time”
- Century 21 now feels betrayed by insurers who were supposed to protect in such a crisis.
- Century 21 is now on the list of 2020 retail bankruptcies with Lord & Taylor, Neiman Marcus.
Why Century 21 is filling Chapter 11 bankruptcy
When September 11, 2001, terrorist attacks almost destroyed the Century 21 department store in Lower Manhattan, the discount target had to close its doors for six months.
Century 21, with the assistance of its insurers, was, however, able to finalize a refurbishment of ten million dollars and repair the damages resulting from the attack.
As a result, the Century 21 escaped tragedy and continued to expand its territorial ownership, eventually opening up 13 seats. Unfortunately, this is not to be mistaken for a second national crisis.
After 19 years following the attacks of 9/11, Century 21 filed for Chapter 11 bankruptcy with the announcement of the permanent closure of the 13 stores, including the flagship of Lower Manhattan.
The co-CEO of the chain and its founder’s son, Raymond Gindi, says that the insurers “turned their backs on us at the most important time”
In a statement, Century 21 stated that it had no alternative but to close since its insurers did not pay the $175 million they owed. The report emphasizes that some insurance measures “are designed to protect against losses incurred as a direct result of the COVID-19 epidemic.”
Century 21 now feels betrayed by insurers who were supposed to protect in such a crisis.
“Insurance money has helped us rebuild after experiencing the catastrophic impact of 9/11,” Raymond said. They are turning to us at this crucial time to protect us from unforeseen circumstances. ”
Also, Raymond says his family’s business has paid “significant” premiums to their insurers over the years. “If we had got any meaningful portion of the insurance income, we would have saved thousands of jobs and weather the storm in the hope of getting another recovery,” he insists.
Instead, the claim will be closed for business, while many of its insurance providers will be sued.
The insurance lawsuits
Century 21 is not the only American business that conflicts with its insurers. In fact, as of last month, 400 lawsuits had been filed against insurance providers from businesses that had been denied protection amid epidemics.
But bankruptcy attorney Robert Rattet said there may be legitimate reasons for insurance companies to refuse to help companies affected by COVID. Insurance contracts often use very specific terms around business interference policies that protect against harm caused by “God’s actions” (or legal grandeur).
Under such policy, the insurer owes nothing to a business affected by an unforeseen and unforeseen event such as a global epidemic.
“If a policy is not prepared in a certain way, they will deny protection throughout the board,” Rattet said. “They assume the industry will go bankrupt if the [insurance] industry allows coverage under mandatory labor rules.” The New York Times reports that all the business losses associated with the epidemic cost the insurance industry $1 trillion a month.
However, instead of risking bankruptcy, these insurers have now forced more than a few businesses to accept their closet. Century 21 is now on the list of 2020 retail bankruptcies with Lord & Taylor, Neiman Marcus and J Crew.