21st Century Files for Bankruptcy and All Its Stores to Close

There are 13 stores in the 21st century, mostly in New York City and the surrounding metropolitan area. The company attributed the lack of payment on its business interruption insurance as the reason for its demise.

But 21st Century said the final straw was the fact that it had not received the $ 175 million it had filed under its business interruption insurance. It said the policy saved it in the wake of the September 11 terrorist attacks – it had a shop across the street of the World Trade Center, which had been destroyed. But it said it was not able to receive payment this time.

“We no longer have any viable option to close our beloved family business, because our insurers, to whom we have paid protection in significant circumstances every year, like the circumstances we are facing today. Important Time, ”said Raymond Guindy, 21 co-CEO of the century.

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Many companies that file for bankruptcy use the process to shed debts and other liabilities and stay in business. JCPNE and Neiman intend to remain in business. Some, including most American airlines and General Motors (GM), Have come out of bankruptcy and gone on to make record profits. But success stories in retail are more difficult. The 21st Century stated that without the sum insured assuming it was outstanding, it makes sense to proceed directly to a liquidation.

“While the board retailers have suffered a lot due to the Kovid-19 … We believe we had received a meaningful share of insurance income, we were able to save thousands of jobs and withstand the storm.”

But Michael Barry, a spokesman for the industry trade group Insurance Information Institute, said most business interruption insurance policies did not cover losses from the pandemic-forced closure earlier this year.

He said that generally these policies can cause direct physical damage to a company’s place of business, also known as “revenue income policies”, to claim for lost revenue.

“There are many businesses across the country who are suing their insurers, believing a policy of a business interruption when there is no direct physical damage,” he said, adding that ccourts uphold the insurer’s arguments. “To have the resources to pay their legitimate claims, insurers must reject those in which they are not obliged to pay.”

Those legitimate claims include businesses closed in some US cities due to damage caused by protests or riots, or wild damage from hurricanes such as Hurricane Laura or wind damage.

Barry estimates that only 35% to 40% of policies written for medium-sized businesses and large business disruptions are insured. But he said that almost everyone has the same conclusion.

“A policy that covers everything to sell would be prohibitively expensive to the point where no one would buy one,” he said.