It's been two years since Gottschalks Inc. filed for bankruptcy, drawing the curtain on more than a century in business for the Fresno-based department-store chain.
But the company continues to linger on its deathbed -- or at least in a Delaware bankruptcy courtroom -- while its creditors wait to see if they're going to receive any of the money they were owed.
Gottschalks' bankruptcy on Jan. 14, 2009, sent a shock wave through communities where the company operated nearly 60 stores in the western U.S. By the time the last store closed in July 2009, most of its 5,200 employees were out of a job, including at the corporate headquarters in northeast Fresno.
"I think of all those loyal people, the associates we had who lost their jobs, and how they're coming along," said Joe Levy, a grand-nephew of founder Emil Gottschalk. "That's probably my biggest thought, because this disrupted their lives terribly."
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Levy was Gottschalks' chairman and CEO before retiring about eight years ago. He said he tries to stay in touch with as many ex-employees as he can. "Some of them have found jobs, and unfortunately some haven't," he said. "Some of the older folks retired because they decided want to pound the pavement anymore. It's just not easy finding work."
Employees weren't the only ones affected.
Shopping centers also felt the sting of Gottschalks' closing. In the Valley, the bankruptcy left major gaps at Clovis' Sierra Vista Mall; Fresno's Shops at River Park, Fashion Fair mall and Manchester Center; Hanford Mall; and Visalia Mall. Macy's eventually took over the spaces in Visalia and at River Park, and Forever 21 acquired the Hanford and Fashion Fair locations.
"We lost an anchor tenant, which is never good for a shopping center because it creates less traffic for the other stores," said Jim Huelskamp, managing partner of Sierra Vista Mall owner LandValue Management. "And the lease contract was voided, so they didn't make good on the lease commitment and we lost that lease income."
The former Gottschalks space in Clovis, just shy of 100,000 square feet, remains empty.
Thousands of creditors to whom Gottschalks owed millions of dollars were left holding the bag when the company went bankrupt. Most expect to receive pennies on the dollar at best -- but they still are waiting for a federal bankruptcy judge to approve a wind-down plan before any remaining cash or assets can be distributed.
During the past two years, Gottschalks liquidated its merchandise and equipment in going-out-of-business sales and auctioned its real estate and store leases to raise cash.
It remains uncertain when the court will approve the bankruptcy plan and creditors will learn what the final accounting holds for them.
In the plan submitted to the court more than a year ago, Gottschalks estimated that it might have between $4 million and $10 million available to pay its unsecured creditors, after higher-priority secured claims and bankruptcy expenses are paid.
Those expenses -- for attorneys, consultants, accountants and others -- continue to add up as the months roll by.
In its most recent operating statement filed with the court, Gottschalks reports shelling out more than $15.5 million in professional fees and expenses through November since filing for bankruptcy.
The company currently has about $71 million in unsecured claims pending against it.
In the meantime, Levy has formed a new company, Gottschalk by Joe Levy. He and other former Gottschalks executives hope to launch a smaller chain of department stores.
Levy initially announced his plans last April with hopes of opening three stores by November in still-vacant Gottschalks spaces in Clovis, Auburn and Carson City, Nev.
But Levy's timeline has proven to be more fluid than he had hoped. In October, he announced that the Valley's weak economy had forced his plans to slip somewhat.
Now, Levy says, his team is "looking for the first half of 2011."
"We're working on it very diligently, and we have great hopes to have some good announcements in the near future," he said.