Back in 2017, Payless Shoesource Inc., an American discount footwear retailer headquartered in Kansas, United States raised itself from bankruptcy protection successfully.
Sources say that all its stores located in U.S and Canada is going obsolete because of a possible second wave of bankruptcy. Creditors and lenders are blaming the Alden Global Capital Hedge fund partly for this. This event has in turn lead to unemployment of around 16,000 workers and sadness among loyal customers who relied on 2500+ stores and the official website of the Payless chain to buy sandals and boots at affordable rates.
Alden Global Capital Hedge fund is a major lender and holds maximum % of the company’s shares. Critics said that a conflict of interest between Payless Shoesource Inc. and Alden is one of the major reasons for the former company’s downfall. They also said that Alden has failed badly to take the right steps in distressed companies in which it has invested.
Chief Judge Kathy Surratt-States of the Eastern District of Missouri heard the Alden based court arguments on this Wednesday held at St. Louis, Missouri and declared steps to make sure that all the creditors and lenders of Payless Shoesource Inc. get an equal hold on the hedge fund. The court called this measure as being “anti-conflict of interest” which also includes appointing a monitor to supervise the Payless board.
Some of the PayLess’s loyal customers said that they noticed some drastic changes during the difficult months of the company such as empty and unappealing stores unlike before when the stores would be flooded with customers.
The company laid the blame of its bankruptcy on sudden delays from major suppliers, fall in shoe inventory, and lack of equipping all its stores with an online presence.
This new found issue of bankruptcy is suspected to hold Alden Hedge fund accountable for repayment.