The InterConnection VOLUME 6
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ISSUE 6
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NOVEMBER/DECEMBER 2018
2018 Credit Conference Update education for our members who need financial support. A special thanks to both Uline and The Chamberlain Group for their support of the raffle.
Lillian Novak
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n the midst of NACM Connect’s conference season, with St. Louis and Chicago under our belts and Columbus taking place in the near future, we are again very grateful for the support of our members and vendor community for supporting these events. Gateway’s attendance reached the highest number since becoming part of the Connect family, Chicago numbers beat budget for attendees, and we welcomed the largest number of exhibitors in over fifteen years. The Great Lakes Conference in Columbus is also on track to be the best attended since Great Lakes came under the Connect umbrella.
Members, staff and vendors have been having fun with the tailgate theme, coming dressed sporting the logos and slogans of their favorite sports teams. An assortment of games and activities were not only fun, but helped us to raise money for the Robert Vodraska Scholarship Foundation, ensuring continuing
“Our volunteer committees and staff work very hard in trying to provide the type of event that is of the most benefit to our members, both educationally and as a way to network with other members and vendors while having fun,” stated Phil Lattanzio, CCE, President of NACM Connect. “We are always looking for ways to improve our conferences and hope we are hitting that mark.” Please enjoy our pictorial recap of St. Louis (page 14) and Chicago (pages 16-17). We will share pictures from Columbus in our next edition.■
The Risky Business of Extending Credit to Ch. 11 Debtors Andrew Michaels, NACM Editorial Associate
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nce a thriving toy retailer, Toys “R” Us is no more. Debt struggles repeatedly struck the popular chain store in 2016 and led the company to hire a law firm for corporate restructuring the following year. In September 2017, the centuryold New Jersey-based company filed for Chapter 11 bankruptcy, only to decide to liquidate in March 2018. Despite the impending downfall, suppliers stayed supportive of Toys “R” Us by extending hundreds of millions of dollars in trade credit and lengthening invoice payment
periods, hoping the retailer would turn around—an objective Toys “R” Us vocally expressed to its suppliers. Instead, Toys “R” Us left suppliers high and dry after announcing plans to liquidate its assets, close hundreds of stores across the U.S., and effectively leave suppliers unpaid. It’s not unusual for suppliers to lend a hand to a Ch. 11 debtor, or in this case, lend credit, but when murmurs of bankruptcy arise, broken promises of payment can strain or even sever a business-to-business relationship. Just because a debtor is in Ch. 11 doesn’t necessarily mean credit managers should avoid their business. Due diligence must be a priority, said Bruce Nathan, Esq.,
partner with Lowenstein Sandler LLP of New York. What happened with Toys “R” Us doesn’t happen in every Ch. 11 case. Sometimes, Nathan said, debtors file for Ch. 11 reorganization and restructuring, continue paying administrative costs and then exit fairly unscathed. Then, there’s the liquidation process seen with Toys “R” Us. Continued on page 31>>