Many people wonder what happens with their gift cards when a company files bankruptcy. When a company files chapter 7, they intend to close and liquidate their assests to pay off their debtors. In these cases, it is unlikely that the gift cards will be redeemable. However, when a company enters into a Chapter 11, they are attempting to reorganize and continue operating. Therefore, it is likely that they will continue to accept gift cards, and will receive a first day court order to allow this practice to continue. But don’t wait too long to use them. Sometimes a Chapter 11 can turn into a Chapter 7 if the company’s financial position continues to fail. If you have any questions about what happens with your gift cards after a company files bankruptcy, give our office a call at (410) 484-9000. We would love to answer your questions.
Can I Use My Gift Card When A Company Files For Chapter 11?
Ronald J. Drescher has been practicing since 1986 in the areas of business transactions, commercial litigation, loan documentation, bankruptcy, creditors’ rights, and out-of-court workouts. His experience also includes corporate reorganizations, insolvency, business and tax planning.