Oaktree Capital Management LP, a debt investor in Claire’s Stores Inc., is criticizing how the retailer is marketing its assets in bankruptcy court, saying the sale timeline is so short that potential new bids might not reflect improvements to its operations, WSJ Pro Bankruptcy reported. The seller of accessories and jewelry aimed at girls and young women entered bankruptcy in March with a reorganization plan already blessed by private-equity owner Apollo Global Management LLC and major first-lien debtholders. From the start, Oaktree opposed the deal, saying holders of $240 million in second-lien notes have been unfairly shut out of the negotiations, which could pave the way for first-lien creditors to control of the company when it leaves bankruptcy. The Los Angeles-based investment firm owns 72 percent of Claire’s second-lien debt and has said that it would get nothing in the reorganization. Oaktree also said Apollo’s proposed role in the reorganized Claire’s should come under particular scrutiny since, besides being Claire’s equity owner now, it also owns first-lien debt that could be converted into equity in the new company.
