Liquidators to wind down U.S. department store chain Bon-Ton (updated)
18/04/2018 03:43
(Adds Bon-Ton statement, recasts)
By Jessica DiNapoli and Tom Hals
April 17 (Reuters) - Bankrupt department store chain Bon-Ton
Stores Inc BONTQ.PK said on Tuesday it received a winning bid
from a joint venture, including Great American Group and Tiger
Capital Group, to wind down the its operations.
A joint venture of the holders of Bon-Ton's 8.0 percent
second lien secured notes due 2021, Great American Group LLC and
Tiger Capital Group LLC will acquire the inventory and certain
other assets of the company, Bon-Ton said in a statement.
urn:newsml:reuters.com:*:nPn3Gb6h6a
"While we are disappointed by this outcome and tried very
hard to identify bidders interested in operating the business as
a going concern, we are committed to working constructively with
the winning bidder," Chief Executive Bill Tracy said in a
statement.
Bon-Ton, which traces its roots to 1854, had hoped in recent
days that a pair of landlords and a private equity firm would
actively bid at the auction and try to save the business.
However, sources told Reuters on Monday that the auction
started without the landlord group. urn:newsml:reuters.com:*:nL2N1RI1WP
Great American Group and Tiger Capital Group, which
specialize in winding down retail chains, won the auction with a
bid estimated to be worth $775.5 million, according to two
sources close to the situation. The pair bid against other
liquidators.
The money raised from the auction will be used by Bon-Ton to
repay its creditors.
A portion of the winning bid came in the form of a credit
bid, or when a creditor uses some of what they are owed instead
of cash, sources told Reuters. Bondholders' credit bid
contributed at least $100 million to the value of the winning
bid, according to the sources.
The failure of Bon-Ton, with headquarters in York,
Pennsylvania and Milwaukee, comes weeks after Toys 'R' Us began
a piecemeal liquidation of its namesake stores and Babies 'R'
Us, the latest sign of upheaval in the retail industry.
A U.S. Bankruptcy Court hearing will be held in Wilmington,
Delaware on Wednesday to approve of the winning bid, clearing
the way for the liquidators to begin selling store inventory,
leases and fixtures.
Throughout the court-supervised asset-sale process,
Bon-Ton's stores, e-commerce and mobile platforms under the
Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman,
Herberger's and Younkers nameplates will remain open throughout
the store closing sales, the company said.
It is possible some of the stores will be acquired by
another retail operator that could reopen the stores under one
of the Bon-Ton names.
The company's stores include Carson's, Younkers,
Elder-Beerman, Bergner's, Boston Store, and Herberger's, as well
as Bon-Ton.
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U.S. department store chain Bon-Ton heads to liquidation
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(Reporting by Jessica DiNapoli in New York, Tom Hals in
Wilmington, Delaware and additional reporting by Subrat Patnaik;
Editing by Lisa Shumaker and Gopakumar Warrier)
((thomas.hals@thomsonreuters.com; +1 610 544 2712; Reuters
Messaging: thomas.hals.thomsonreuters.com@reuters.net))