Discount retailer Century 21 sought Chapter 11 bankruptcy protection Thursday and plans to close all of its remaining stores.
The decision to "wind down its retail operations" was made after the company's insurance providers failed to pay $175 million that was due under policies put in place to protect them from losses resulting from the COVID-19 pandemic.
Century 21 co-CEO Raymond Gindi said the company's insurance providers "turned their backs on us at this most critical time."
If the retailer had received the funds, Gindi said the company is "confident" it would have been able to "save thousands of jobs and weather the storm, in hopes of another incredible recovery."
"While insurance money helped us to rebuild after suffering the devastating impact of 9/11, we now have no viable alternative but to begin the closure of our beloved family business because our insurers, to whom we have paid significant premiums every year for protection against unforeseen circumstances like we are experiencing today," Gindi said.
The company said it will be removing from bankruptcy court a lawsuit that is pending in the Supreme Court of the State of New York against several of its insurance providers "based on their failure to compensate the Company for its losses under the policies," the company said.
Century 21 wants the bankruptcy court to expedite the adjudication of the lawsuit for the betterment of its stakeholders.
The remaining 13 stores closing are located in New York, New Jersey, Pennsylvania and Florida.