Big Bazar expected to be declared bankrupt on Tuesday; Over 1,300 jobs at risk
The bargain retail chain Big Bazar can no longer defer payments to its creditors. As a result, there is a high probability that the bargain chain will be declared bankrupt on Tuesday morning, Big Bazar's attorney, Oscar van Oorschot, told ANP on Monday afternoon. Moments earlier, the District Court of Noord-Nederland in Leeuwarden denied the store's request for a cooling-down period to allow it time to restructure and address a situation where debt levels have risen considerably.
This decision allows the company's creditors to proceed with bankruptcy claims against the company. Bankruptcy applications will be brought before the court on Tuesday.
The request for payment deferral was made on Friday so Big Bazar could make arrangements with creditors and reorganize. The chain, which has roughly 120 stores and over 1,300 employees, has been struggling lately, and more and more parties complained that the company was no longer paying its bills.
An increasing number of creditors have notified the courts that Big Bazar has fallen far behind on paying their bills. A review of court documents showed that the company had amassed about 29 million euros in debt, according to Joost Konings, the director of debt collection company Invorderingsbedrijf Amsterdam. He told ANP that figure was likely to rise higher because of property rental payments that went unpaid in September, and now possibly also for October.
The request for payment deferral was denied because the court could not establish whether Big Bazar will be able to meet its obligations even during the requested two-week deferral period. The court does not believe Big Bazar "will have sufficient funds available, whether through working capital, financing or otherwise, to meet its day-to-day financial obligations."
Should Big Bazar be formally declared bankrupt, it will give property owners the opportunity to force Big Bazar to vacate. Landlords will then be able to start over by trying to rent out property to new businesses. “They have already written off the money they still have yet to receive. They now mainly want their property and goods back,” Konings said.
About a dozen companies in total have asked the courts to push the bargain chain into bankruptcy. A forced asset sale could lead to creditors getting at least some of the money owed to them.
