U.S. Bankruptcy Judge Kevin Gross gave Forever 21 the go-ahead on a tentative plan to sell itself to its biggest landlords — a deal that suppliers say will leave them bearing the brunt of the losses, Bloomberg News reported. The stalking-horse bid would see Simon Property Group Inc., Brookfield Property Partners LP and Authentic Brands Group LLC pay $81 million in cash for the fast-fashion retailer and assume a chunk of its debts. Counting the assumed liabilities, which include letters of credit, costs to cure defaults and trade debts, the deal is worth $290 million, Tyler Cowan of Lazard Ltd. said during a hearing in Delaware Tuesday. Lazard is serving as the retailer’s investment banker. This would still leave more than $100 million of vendor claims unpaid, said Jeffrey Waxman of Morris James LLP, which represents a group of suppliers. When the retailer filed bankruptcy in September, it owed suppliers $347 million, according to a court filing by vendors. The proposed sale is the best currently available for Forever 21, though additional potential buyers are still looking at the company, Cowan said. The company has been in default of its bankruptcy loan since before the start of this year, he said.
