After taking a few weeks to weigh its options, Aeropostale says it won’t be able to manage a reorganization under bankruptcy, and instead is getting ready to auction off all its assets in the coming weeks. It’s also taking fire at the lender it claims pushed it into bankruptcy in the first place.
Aeropostale said in court papers July 15 cited by Bloomberg that “reorganization on a standalone basis is not feasible.” Instead, it’s hoping a “stalking horse” — an entity that has shown interest — will make the first bid at an auction next month. Any proceeds from that sale will go to creditors.
The retailer added that it’s still poring over 11,000 pages of documents and depositions produced by senior lender Sycamore partners as part of a bankruptcy probe, and is considering whether or not it’ll pursue claims against the private equity firm.
Upon filing for bankruptcy in May, Aeropostale accused Sycamore of instructing a company it controls to cut off the teen chain’s credit. Instead, Aeropostale claims, the company demanded money for goods up front instead after delivery.
That demand pushed Aeropostale farther down the bankruptcy path, the company said in court papers, all because of Sycamore’s machinations.
Aeropostale says now it’ll try to find that lead bidder by Aug. 15 and hold an auction on Aug. 22 if there’s a sign that anyone else is interested. It listed $390 million in debt and about $354 million in assets in its May Chapter 11 filing.
Aeropostale Seeks to Auction Assets in Bankruptcy Wind-Down [Bloomberg]
by Mary Beth Quirk via Consumerist
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