Century 21 approved to sell rights to Covid-related insurance claims

By Sarah Lizee

Olympia, Wash., Dec. 31 – Century 21 Department Stores LLC secured court approval of a sale of its interest in a lawsuit filed against its insurers, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of New York.

Century 21 said in its motion that the insurers refused to reimburse the company for its losses as a result of the Covid-19 pandemic and ensuing government-ordered store closures. The company and several other policyholders filed the lawsuit in July.

Century 21 is seeking damages of over $175 million and said it is also seeking consequential damages in an amount to be determined.

The company said the sale would allow the debtors to satisfy their pre-petition secured credit facility in full, to make meaningful distributions to general unsecured creditors without having to wait for the conclusion of the insurance action, and to potentially allow general unsecured creditors to receive additional distributions.

New York-based Century 21 owns and operates retail stores that sell apparel, footwear, outerwear, lingerie and accessories. The company filed bankruptcy on Sept. 10 under Chapter 11 case number 20-12097.

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