What Chapter 11 bankruptcy means
Filing for bankruptcy doesn’t always mean the end for an American business.
California-based 99 Cents Only Stores filed for Chapter 11 bankruptcy in April and closed all 371 of its locations.
In May, Dollar Tree acquired designation rights for 170 leases of 99 Cents Only Stores across Arizona, California, Nevada, and Texas, the company said in a statement shared on Wednesday. The deal was approved by the U.S. Bankruptcy Court for the District of Delaware.
“As we continue to execute on our accelerated growth strategy for the Dollar Tree brand, this was an attractive opportunity to secure leases in priority markets where we see strong profitable growth potential,” Michael Creedon, Jr., Dollar Tree’s chief operating officer, said in a statement.
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In March, Dollar Tree and Family Dollar announced the closure of about 1,000 stores across the U.S. after suffering a significant quarterly loss. The closures included 600 Family Dollar stores in the first part of 2024, and another 370 Family Dollar and 30 Dollar Tree stores as their leases expire.
The discount variety stores aren’t the only businesses falling on hard times. Red Lobster recently filed for Chapter 11 bankruptcy protection amid rising costs and an all-you-can-eat shrimp deal that backfired.
But after the bankruptcy announcement, Red Lobster sought to reassure fans – writing in a statement that the legal process is allowing them to make certain cost changes, including the “tough decision” to close some restaurants.
This story was reported from Cincinnati.
