A bankruptcy judge extended the suspension of Modell’s Sporting Goods Inc.’s bankruptcy case until the end of May, allowing the retailer to stop paying rent as it waits for New York and neighboring states to lift restrictions on most shopping, WSJ Pro Bankruptcy reported. Bankruptcy Judge Vincent Papalia yesterday also ordered mediation between Modell’s and the many landlords clamoring for more certainty that the retailer will ultimately pay its back rent. Modell’s, a more-than-century-old New York-area sporting-goods retailer, filed for bankruptcy in March to liquidate its inventory but quickly pivoted when New York and other states imposed restrictions on all nonessential shopping, laying off all employees at its stores and distribution centers as well as most corporate office workers. In March, Judge Papalia allowed Modell’s to “mothball” its 134 stores until May 10 rather than continue with liquidation sales, citing the extraordinary circumstances created by the coronavirus pandemic. The judge also allowed Modell’s to stop paying rent, despite protests from landlords.
