Pawn America Files for Chapter 11 Bankruptcy Protection
Bradley Rixmann, president of Pawn America Minnesota LLC, submitted forms on Wednesday seeking Chapter 11 bankruptcy protection for the Burnsville-based pawnshop chain.
Filings indicate the company owes between $10 million and $50 million to at least 200 creditors, but no more than 1,000 parties.
Among those Pawn America is most indebted to are television stations, both local and in neighboring states. KARE11 is owed more than $96,000 for advertisement spots, bankruptcy documents show. WCCO-TV is also owed nearly $75,000.
The company also owes money to two local banks. St. Paul-based Western Bank has an unsecured claim totaling nearly $380,000, which is linked to Pawn America’s Inver Grove Heights location. About $280,000 is also owed to Golden Valley-based Venture Bank for a loan in the name of its Hopkins store.
The pawnshop chain, which opened its first store in Robbinsdale in 1991, now has 24 locations in Minnesota, Wisconsin, North Dakota and South Dakota.
Making a profit in the pawnshop business can be notoriously difficult with success dependent on quickly turning inventory with a minimal price markup. Rixmann spoke to TCB in 2015 about the challenges of the business.
“This is an unfortunate circumstance,” Rixmann said in a statement. “We are committed to confronting this challenge and to building a stronger Pawn America for our customers, employees and other stakeholders. While we will have to make tough decisions going forward, Pawn America will emerge stronger and better able to compete in the marketplace.”