Big Lots has received court approval for a rescue deal, ensuring the survival of many stores despite pushback from creditors and vendors
Wilmington: So, Big Lots just got the green light for a rescue deal in court. It’s a big win for them, especially since they were facing some serious pushback from vendors who felt the deal was unfair.
The judge, J. Kate Stickles, approved the sale to Gordon Brothers Retail Partners. They plan to take over between 200 and 400 Big Lots stores, which could save a bunch of jobs. That’s a relief, right?
This deal comes right after another one with Nexus Capital fell through. Vendors were really upset because they felt they were getting the short end of the stick, losing money while lenders were getting paid back.
Big Lots has already started closing sales at over 800 stores. They even said they’d go for a total liquidation if this deal didn’t go through. Talk about pressure!
During the hearing, the judge mentioned that neither option was perfect, but this sale was the best way to get the most value out of Big Lots’ assets to pay back creditors.
Gordon Brothers will take over Big Lots’ assets and cover the Chapter 11 loan, plus some unpaid rent and fees. It’s a hefty price, but it’s necessary.
Vendors were not happy, claiming Big Lots kept ordering goods even after filing for bankruptcy, knowing they didn’t have enough cash. That’s a tough spot to be in.
With around $250 million in bankruptcy costs, Big Lots is in a tight bind. If they had to liquidate, it would mean losing thousands of jobs and even more losses for creditors.
Company lawyer Adam Shpeen made it clear: there’s really no other option. A liquidation would just be a total disaster.
This case is being handled in the US Bankruptcy Court for Delaware, and it’s definitely one to keep an eye on.
