Dover, Delaware — On December 31, the U.S. Bankruptcy Court for the District of Delaware conditionally approved the sale of Big Lots’ assets to Gordon Brothers Retail and transfer to Variety Wholesalers, Inc., a Top 20 home textiles retailer.
At a hearing scheduled for January 2, the issue will be considered as part of a discussion of the order’s form.
On December 27, the bargain retailer from Columbus, Ohio, announced that it had reached an asset purchase agreement with Gordon Brothers Retail Partners. This agreement allows Big Lots to transfer its stores, distribution centers, and intellectual property to other retailers and businesses, such as Variety Wholesalers, Inc. On December 30, a modified sale order was submitted to the court, taking into account feedback from certain interested parties.
Judge J. Kate Stickles accepted the amended order late on December 31 and stated that it optimizes assets to pay creditors back, according to a Bloomberg story.
According to Reuters, Serta Simmons Bedding and Tempur Sealy International were two of the businesses that opposed the deal. Big Lots accumulated $250 million in new debts that are likely to remain unpaid under the revised selling arrangement, according to Beth Rogers, an attorney representing Serta, who stated on Dec. 31 that the company kept ordering furniture and other merchandise even after recognizing it would not have the money to pay for them, according to Reuters.
The purchase price includes a maximum debt payoff of $304 million, $17 million for unpaid “stub” rent, $42.391 million for the APA administration budget, $125 million for amounts in the winddown budget, and $7.5 million for the professional fee escrow account, according to documents submitted to the court.
In accordance with the arrangement, Variety Wholesalers will purchase 200–400 Big Lots stores and maybe two distribution centers, which it will then run under the Big Lots name. Additionally, Variety Wholesalers may hire Big Lots employees at the stores and distribution facilities it has bought, in addition to specific corporate employees required to support the company’s future growth. Under the names Roses, Roses Express, Maxway, Bill’s Dollar Stores, Super 10, Super Dollar, and Bargain Town, the Henderson, North Carolina-based corporation owns and runs 380 locations throughout the Southeast United States.
With an estimated $1,000,000,001 to $10 billion in assets and $1,000,000,001 to $10 billion in liabilities to an estimated 5,001 to 10,000 creditors, Big Lots filed for Chapter 11 protection on September 9. The store started liquidation sales at its remaining sites after announcing an APA with Nexus Capital Management that same day. The APA fell through in December.
