Oaktree Capital Management LP is trying to put together a $1.5 billion bid for bankrupt teen retailer Claire’s Stores Inc., a lawyer for the junior noteholder said at a hearing on Friday, WSJ Pro Bankruptcy. Oaktree, an investment firm that holds $159 million in Claire’s secured second-lien notes, has long opposed the teen retailer’s existing reorganization plan, saying it favors senior bondholders as well as private-equity firm Apollo Management Holdings LP. Apollo holds Claire’s equity as well as some of its debt. Claire’s went private in 2007 in a leveraged buyout led by Apollo. An Apollo investment fund owns 98 percent of the equity of parent Claire’s Inc., which is also part of the bankruptcy. Last month Oaktree said that it had submitted a bid superior to the offer currently on the table. The firm did not at the time disclose the value of the preliminary all-cash offer but said it would be paid in a lump sum and would yield greater recoveries than those offered under the existing plan. Oaktree also said at the time that it was still trying to raise the financing.
