In its bankruptcy proceeding, Big Lots has filed notice of a successful bidder for its assets, Gateway BL Acquisition, an affiliate of Nexus Capital Management.
In early September, Big Lots initiated voluntary Chapter 11 proceedings in the United States Bankruptcy Court for the District of Delaware that set up the affiliate as the stalking horse bidder for the company’s assets, according to a filing with the court.
Debtors selected the stalking horse bid but with certain modifications, including:
- A target closing date of December 2 or 3, assuming all conditions to closing have been met and so long as any additional costs associated with December rent and other December monthly costs are assumed and paid by the buyer.
- A transition services agreement with Big Lots providing TSA services that the buyer reasonably requests at fully loaded cost subject to the debtors’ ability to provide such services, including certain employee benefits specified by the buyer until February 15, 2025, and use of existing bank accounts to operate business for a reasonable period of time to permit orderly transition, if necessary.
- A post-closing designation of leases such that the buyer shall have the right to require additional actions on leases that have not yet been rejected by Big Lots.
- A consultation agreement between Big Lots and Gateway to reasonably consult with each other regarding the disposition of real estate and leases upon the other party’s request.
Big Lots will seek approval of the sale to Gateway and Nexus at a hearing scheduled for November 12.
In a note on retail developments, Pulse Ratings pointed out that, as no other “Qualified Bids” came forward, it seems that unsecured creditors are looking at minimal recoveries given that the Nexus bid is based mainly on the assumption and repayment of existing secured debt and certain liabilities. In addition, a hanging question remains regarding the Nexus modifications and how many additional leases it may target for rejection.
