In a blow to small business in New York, a Nutritional Supplement Company has filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. DESA of NY, not to be confused with the United Nation’s Department of Economic and Social Affairs, declared bankruptcy in July of 1018. The organization officially completed and filed their petition for Chapter 11 bankruptcy with the US Bankruptcy Courts in the Eastern District of New York. The headquarters for DESA of NY was located in the beautiful and trendy shopping mall chain called Tanger Outlets in Deer Park, NY.
DESA of NY’s Chapter 11 Case
In all DESA of NY, Inc. estimates that it has 1-49 creditors, owing $100,001 to $500,000 in debt. Reliant Funding has an unsecured claim of $20,000, however, the company is disputing the cash advance claim. Additionally, General Nutrition Corp., an apparent vendor to DESA of NY is owed $300,000. An amount the organization is also disputing in bankruptcy court.
GNC Franchise Bankruptcy Filing
The GNC chain, filed as a small business debtor in New York Eastern Bankruptcy Court on July 12th, 2018 by completing its voluntary petition for Chapter 11 bankruptcy. The President of DESA of NY, Javaid Choudhury, is listed among the creditors for having substantial personal property interests in the business. The combined property of the bankruptcy estate only consists of a checking account worth just over $3,000 and some office furniture, a point of sales system, and a couple of PCs.
Additionally, DESA listed Meena, Inc. as a business partner or affiliate that is also filing its voluntary petition for Chapter 11 bankruptcy protection. Meena, Inc. is associated with a second GNC location in Deer Park, NY, but this store only listed $0 to $50,000 in assets and $100,001 to $500,000 in liabilities. Meena’s case will also be presided over by US Bankruptcy Judge Robert E. Grossman
More Retail Store Closings
This company, General Nutrition Corp, appears to be at the center of this bankruptcy. DESA of NY listed having an access inventory of $50,000 worth of General Nutrition’s vitamins and protein powder. This bankruptcy case appears to be fairly open and shut, with the tale of a small business owner forced to shut down a franchise, whose parent organization isn’t doing so well itself. GNC Holdings Inc. announced in April 2018 that it would close 200 of its stores this year. With even the holdings company struggling, it’s uncertain but likely that more small business franchise owners who operate GNC retail stores may be turning to Bankruptcy Court.