Someone who attended the Whitehall bankruptcy hearing yesterday sent in this report …
Whitehall is taking the position that they are entitled to sell all their consignment goods for their benefit, unless the consignors can be shown to have a perfectly updated UCC filing. In most cases, that won’t be the case. Whitehall changed their name last year. It’s a complete gotcha. They know it. I don’t think it is going to stick.
Only a bank and a hedge fund that is exiting the industry would try to pull this. If they are successful with this, no one will ever do memo in the industry again (which wouldn’t necessarily be a bad thing.)
The chain’s survival is “up in the air,” the source says. This person does think some of the Whitehall stores will be sold, although “a lot of them will be closed.”
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