Court declares Big Bazar bankrupt as workers go unpaid; 1,300 lose their jobs
The District Court in Amsterdam formally declared Big Bazar bankrupt on Tuesday. The discount retailer was struggling with financial problems for an extended period of time, but an increasing number of groups filed complaints about unpaid bills. On Monday, Big Bazar made one last-ditch effort at a rescue attempt during a court hearing in Leeuwarden, but their efforts failed. It also emerged that the company has not paid its staff any wages during the month of September, with all 1,300 expected to lose their jobs.
Big Bazar has suffered annual losses of between 13 million and 17 million euros between 2020 and 2022. The District Court in Leeuwarden refused the company's request on Monday to appoint a debt expert to help the company out of its financial problems. It was Big Bazar's third attempt to have an expert brought in, but the refusal made it possible to again process creditors' claims regarding bankruptcy on Tuesday.
On the two other occasions, Big Bazar also submitted its requests for a debt expert just before the deadline. As a result, the applications for bankruptcy were repeatedly put on hold. In total, more than 30 filings were made against Big Bazar. But the court did not want to grant Big Bazar's request because the company was unlikely to be able to meet its current financial obligations.
Last summer, the 16-year-old bargain retailer said that it was in financial trouble. According to Big Bazar, this was due to the significant price increases seen at other retailers, which led to customers having less money to spend.
Many of Big Bazar's bills have not been paid lately, to the annoyance of commercial property landlords and suppliers. The mountain of debt rose to several tens of millions of euros. For a long time, CEO Heerke Kooistra hoped to avert bankruptcy by closing loss-making stores. Big Bazar was more often forced to vacate a store as the result of lawsuits due to rent arrears.
The bankruptcy means 1,300 employees will lose their jobs. It was also announced on Tuesday that Big Bazar could not immediately pay wages for September, although the company promised to do so on Monday. According to the store chain's lawyer, the payment of salaries just before an expected bankruptcy could be interpreted as a prohibited favoritism for one group of creditors at the expense of others.
In an internal communication to employees, Big Bazar blamed the problem regarding payment of wages on two creditors, including the former parent company, Mirage Retail Group. "Unfortunately, we have to let you know that wages will not be paid. We would very much like to do this for you and we have the resources to do this for you," the message said.
Big Bazar lawyer Oscar van Oorschot stated that the chain was very keen to pay the employees, but if creditors other than the staff feel disadvantaged, the entire settlement of the expected bankruptcy could begin amid a very negative atmosphere. The lawyer argued that the staff always gets their wage claims paid in the event of bankruptcy.
Labor union CNV also read the announcement about wages. "This is exactly what we were worried about, this tug-of-war is murder," said union leader Erik Maas. He also expressed his admiration for the staff's efforts, who continued to work for Big Bazar despite the major financial problems.
Joost Konings, of debt collection agency Invoeringsbedrijf, also commented on behalf of several Big Bazar creditors. He was critical of the company's attempts to avert bankruptcy. "You may ask yourself how far a defaulter can go in using legal remedies just to stretch things out. Creditors have become the victims."
Reporting by ANP