By Janine Phakdeetham, Finbarr Flynn and Jonathan Randles | Bloomberg
Discount retailer Big Lots Inc. has filed for bankruptcy protection and plans to sell the firm’s assets and ongoing business in a court-supervised process.
The Columbus, Ohio-based company said it filed for Chapter 11 bankruptcy in Delaware, according to a company statement. It listed assets and liabilities of $1 billion to $10 billion in its court petition. Chapter 11 allows a company to continue operating while it works out a creditor repayment plan.
Also see: Big Lots closing 75 stores in California. See the list
Big Lots sought court protection after suffering from years of declining same-store sales and closing location. It entered into a sale agreement with an affiliate of private equity investor Nexus Capital Management LP, according to the retailer’s announcement. Under the agreement, Nexus will serve as a “stalking horse bidder”, meaning that if no higher or better offers come from other parties, Nexus will buy the business.
Big Lots anticipates the transaction to close during the fourth quarter of 2024 if Nexus remains the winning bidder, the statement added. The proposed transaction must be approved by a bankruptcy court judge.
MARKET UPHEAVAL: Albertsons unveils list of 63 California stores to be sold ahead of trial
The retailer has secured commitments for $707.5 million of financing in the form of a post-petition credit facility, according to the company. As a result, Big Lots expects to have sufficient liquidity while it works to complete the sale transaction, it said.
The bankruptcy financing provides Big Lots with $35 million in new money and rolls up other company debt, according to court documents. A roll-up moves existing company debt to the front of the repayment line in lockstep with newly lent money.
Big Lots has filed a number of customary motions to continue paying employee wages and other ordinary business expenses in Chapter 11. It said it has about 9,600 full-time employees and about 18,100 part-time employees.
MEMBERS ONLY: Costco card entry scanners popping up at Southern California warehouses
The company said it closed dozens of stores and cut costs in order to save money. It has about $556 million in long-term debt, according to court documents.
Big Lots is among a number of troubled retailers that have been hurt by a slowdown in home spending. Retailers Conn’s Inc. and LL Flooring Holdings Inc. also filed bankruptcies in recent months.
The case is Big Lots Inc., number 24-11967, in the US Bankruptcy Court for the District of Delaware.
Related Articles
Redbox owner to be liquidated, all kiosk locations will be closed
EV maker Fisker in Manhattan Beach files for bankruptcy protection
Judge denies embattled LA developer’s bankruptcy request over ill-fated homeless housing projects