Big Lots once again faces the threat of liquidation as it tries to finalize a deal with Gordon Brothers to keep hundreds of stores open, according to a new report from Bloomberg.
Key Facts:
• Big Lots filed Chapter 11 in September, operating more than 1,300 stores at the time.
• A proposed deal would sell Big Lots to Gordon Brothers, which plans to transfer 200–400 locations to Variety Wholesalers.
• Some creditors and landlords feel they have not had enough time to review the agreement and that it disadvantages them.
• Big Lots believes the new proposal must close quickly to avoid liquidation.
• A judge has postponed approval until creditors and the company can continue negotiations.
The Rest of The Story:
Big Lots originally planned to sell itself to Nexus Capital Management, but that deal fell apart.
Then Gordon Brothers stepped in, offering to repay certain debts and cover some of the retailer’s expenses in bankruptcy.
The arrangement, however, has met resistance from landlords, vendors, and others who want more information about the agreement’s terms.
The bankruptcy court delayed its decision, allowing one more day for the company and creditors to work out their differences.
If the deal goes through, Gordon Brothers will assume Big Lots’ debts and seek to keep a portion of the stores operating.
If it fails, vendors may push to liquidate all remaining locations.
A new proposal to prevent Big Lots from shutting all its stores is at risk following complaints from some creditors that stand to incur losses in the troubled retailer’s bankruptcy https://t.co/XXdYm6VBUv
— Bloomberg Asia (@BloombergAsia) December 30, 2024
Commentary:
It appears that Big Lots’ best chance to keep stores open is to satisfy creditor demands and show that this transaction is financially sound.
The company has been under serious strain, and meeting obligations on rent and fees will be crucial to moving forward.
We hope Big Lots can accomplish this, not only to protect the business but also to support its employees who rely on the retailer for their livelihoods.
The Bottom Line:
The fate of Big Lots hinges on creditor confidence and the completion of this new deal.
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If a resolution is reached, hundreds of jobs and stores may be saved.