(Bloomberg) — Bankrupt retailer Big Lots Inc. not anticipates it will possibly complete its asset sale to personal equity firm Nexus Capital Management LP and can start the sale of its stores in coming days to guard the worth of its real estate.
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The discount chain that employs greater than 27,000 people said in an announcement Thursday it continues to look for one more method to stay in business through a transaction it might look to finish by the top of January if a deal will be struck.
“All of us have worked extremely hard and have taken every step to finish a going concern sale,” Bruce Thorn, Big Lots’ president and chief executive officer said. “While we remain hopeful that we are able to close another going concern transaction, with a purpose to protect the worth of the Big Lots estate, we have now made the difficult decision to start the GOB process.”
The announcement comes as a valuation appraisal of the corporate’s inventory was lower than expected, making the economics of the sale to Nexus not viable, in response to individuals with knowledge of the matter who asked to not be identified discussing a personal matter. At the identical time, landlords had pressured the corporate in court to elucidate why it hadn’t closed the take care of Nexus, which agreed to purchase the corporate after it filed for Chapter 11 in September.
An official committee of unsecured creditors on Monday had asked in court that the corporate either pay tens of tens of millions of dollars in back rent, or be liquidated by a court-approved trustee.
Shuttering Stores
Big Lots will begin going-out-of-business sales at about 870 stores, company attorney Brian M. Resnick said during a hearing Thursday in front of US Bankruptcy Judge J. Kate Stickles.
The corporate continues to be talking to Nexus and one other firm about saving “several hundred” stores as an alternative of the complete group Nexus had originally agreed to take over, Resnick said. That long-shot effort would have to return together “in a few weeks,” Resnick added.
There could be very little time to get a recent deal, in response to Stickles. “That is what I might characterize as a melting ice cube,” she said.
A representative for Guggenheim Partners, which is advising the corporate, declined to comment. Representatives from Big Lots, Nexus, in addition to Kirkland & Ellis, which is advising Nexus, and the corporate’s legal counsel Davis Polk & Wardwell, didn’t return messages in search of comment.