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Sports Authority Fails to Find Buyer, Will Close All Locations

Posted on in Bankruptcy Attorney

Sports Authority Fails to Find Buyer, Will Close All Locations

In an earlier post, we discussed the financial troubles plaguing sports equipment retailer Sports Authority. Now, the company has announced that it is closing its doors because it failed to find a buyer interested in keeping the brand and its stores alive. Instead, an auction was held for the company's assets. A group of liquidators won the auction and has begun the process of selling off the company's remaining inventory. Other retailers, including competitors Modell's and Dick's Sporting Goods, bid to purchase and lease current Sports Authority locations.

This is one of the scenarios that can occur when a company files for Chapter 11 bankruptcy. For information about it and other scenarios, speak with an experienced bankruptcy attorney.

Going Out of Business as a Last Resort

When a company cannot overcome its debts, its owner has the option to file for bankruptcy to work with the court to create a plan to get out from under the debt. Sometimes, as is the case with Sports Authority, liquidating the company's assets and closing all existing outlets of the company is the right option.

Sometimes, liquidation is an alternative to bankruptcy. When a business owner realizes that his or her company cannot be profitable again and does not care to challenge that, he or she might simply choose to close the company's doors. Other times, companies merge with larger, more profitable companies, in order to become profitable again.

Examples of famous companies that have gone out of business due to low profits include:

  • Compaq;
  • E.F. Hutton;
  • Merry-Go-Round;
  • Eastern Airlines; and
  • Pan Am.

Determining your Options

When you are the owner of a business that cannot get its debt under control, it can be difficult to divorce yourself from the debt enough to look at your options rationally. This is why you should speak with an experienced bankruptcy attorney before you make any decisions about how best to handle your debt. There might be options you are overlooking or the situation could be more dire than you realize. Only a detached, neutral party with experience evaluating this type of case can accurately determine the right option for you and your company.

Work with an Experienced Chicago Bankruptcy Attorney

Companies start, grow, and face difficult times. Sometimes they survive these difficult times and come out more profitable than before and other times, they have to close up shop. This is simply the nature of a free market economy. If you are facing the difficult decision of whether to close your business or not due to economic difficulties, contact our team of experienced bankruptcy attorneys at Newland & Newland, LLP. We can provide you with answers to your questions and legal guidance to help you make the right decision. Call our firm today to schedule your free legal consultation. Our offices serve Arlington Heights, Libertyville, Waukegan, Itasca, and Chicago.

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