On September 9, 2024, Big Lots, Inc. filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court in Delaware.
At that moment, the company had initiated plans to sell its operations and assets through an agreement with an affiliate of Nexus Capital Management LP.
However, Big Lots has now disclosed that it is unable to move forward with this sale.
Setbacks in Bankruptcy Financing
This setback not only includes the collapse of the proposed transaction with Nexus but also highlights the company’s default on its bankruptcy financing agreements.
Additionally, Big Lots is struggling to make timely payments to its vendors and landlords following its bankruptcy declaration.
These issues have raised serious concerns regarding the company’s capability to reorganize effectively.
Shift to Liquidation Sales
Given these mounting challenges, Big Lots will shift its focus toward liquidation sales, striving to maximize the value of its bankruptcy estate.
This implies that the company is likely to reject most of its leases as part of the bankruptcy process.
However, there remains a chance that select leases could be sold off separately, or that a new, viable deal may emerge as the situation develops.
Legal Rights for Landlords and Creditors
For landlords and trade creditors affiliated with Big Lots and its subsidiaries, understanding their legal rights during this time is essential.
To assist in navigating this complex process, Stark & Stark’s Shopping Center and Retail Development Group is readily available.
The firm has a strong history of representing clients in various bankruptcy matters, tackling cases across different jurisdictions that include notable names like Rite Aid, Blink Fitness, and Toys R Us.
Source: Natlawreview