In July of 2017, dressmaker Alfred Angelo filed for Chapter 7 bankruptcy after more than 75 years in the bridal dress business. The 60 Alfred Angelo shops were shuttered immediately. This came as a surprise to dress retailers and the brides who had ordered Alfred Angelo gowns through them, some of whom are now scrambling to find out if they will receive their dresses or if they will have to get new gowns at the last minute.
In most stories about businesses filing for bankruptcy, the business filed for Chapter 11, or reorganization, bankruptcy. Chapter 11 is designed to help a company rework itself into a profitable business. In contrast, Chapter 7 bankruptcy is a way for a company to liquidate its assets and fulfill its debt obligations before going out of business. The process makes the liquidation and repayment of a company’s debts smoother by bringing in a bankruptcy trustee to facilitate these processes.
Brides Do Not Know if Their Dresses Will Ship
Perhaps the most concerning part of this story is what Alfred Angelo will do about the brides who are now unsure about the status of their dresses. Bridal gowns are time-sensitive objects and often need alterations, requiring brides to secure their gowns long before their actual wedding dates.
In response, many other dress shops, such as David’s Bridal, offered discounts to brides whose dresses could be lost. Some offered rush options for brides and bridesmaids forced to choose new dresses on short notice.
Alfred Angelo advised women with dresses waiting to ship to email the company’s bankruptcy trustee with details about their orders and to check the company’s website for new information as it comes out. If communication with Alfred Angelo does not yield results, customers can file complaints with their respective state business regulators to seek legal recourse. The Federal Trade Commission (FTC) also urges customers to steer clear of “recovery scams,” scams offering new dresses or discounts from disreputable parties.
Effects of Bankruptcy
An abrupt bankruptcy like Alfred Angelos’ does not only affect a company’s customers, it can affect its vendors, its partners, and retailers that stock its product. Independent bridal shops and other dress retailers are also largely unsure whether, and if so, when, they will receive the Alfred Angelo dresses their customers ordered. Some shops have reported receiving dresses, others have reported not receiving a thing, and others yet have reported receiving single dresses or parts of orders for sets of bridesmaid dresses.
Work with an Experienced Palatine Bankruptcy Lawyer
As a business owner, it is important that you educate yourself about bankruptcy even when business is strong and profits are high. How you handle your bankruptcy case will make a significant difference to how your company recovers and how those connected to your company are affected. To learn more, contact our team of experienced bankruptcy lawyers at Newland & Newland, LLP today to set up a consultation with a member of our firm.
(image courtesy of Brandon Morgan)