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Gump’s, a storied luxury department store in San Francisco, has begun a going-out-of-business sale after 157 years in business, WSJ Pro Bankruptcy reported. A judge on Friday granted Gump’s permission to liquidate inventory at its flagship store, located near San Francisco’s Union Square. The going-out-of-business sale is being advertised on Gump’s website. In a message to customers, the retailer said that “though this decision has been difficult, we are pleased to offer our entire selection one last time.” Founded in 1861, Gump’s filed for chapter 11 protection earlier this month, saying the shop’s sales had rapidly deteriorated since the start of the year. Attempts by Gump’s owners to sell the business or solicit new investors failed, precipitating the bankruptcy filing. Read more. 

Occupancy issues are at the heart of many significant retail cases, as detailed in the ABI publication Retail and Office Bankruptcy: Landlord/Tenant Rights, available at the ABI Store.

Toys “R” Us Inc. has officially closed its U.S. operations, but two key sales are still ongoing for the troubled retailer as it tries to find buyers for its intellectual property and Asian business, WSJ Pro Bankruptcy reported. Despite court papers and lawyers touting robust interest and lucrative bids, the auctions have yet to take place as there have been considerable delays to the sale timelines. In April, weeks after Toys “R” Us announced it would close its more than 800 stores in the U.S. and wind down its business, company attorneys said during a court hearing that the Asian business was beckoning bids of more than $1 billion. Interested bidders were said to be looking to buy an 85 percent stake in the Asian operations. The Asian business, although often brought up during court hearings, went without an official bid, until last week.

Senior lenders to Toys “R” Us Inc. will make an opening bid of $760 million for the bankrupt retailer’s Asia operations, far less than the $1 billion offers the company touted just a few months ago, Bloomberg News reported. The lenders would make a so-called "credit bid" by using their senior secured notes in the Asia business rather than cash, and win ownership of the unit during an auction next month in New York, according to court documents filed Saturday. Noteholders eligible to participate include York Capital Management Global Advisors LLC, Barclays Bank Plc and Cerberus Capital Management LP, related court papers show. Before an auction is scheduled, Toys wants a U.S. federal judge to strip the company’s minority partner in Asia, Fung Retailing Ltd., of its right-of-first-refusal purchase option as well as forcing Fung to agree to sell its 15 percent stake in the joint venture. Toys’s 12 percent first-lien bonds that mature in 2021 fell more than 5 cents to 70.5 cents on the dollar on Monday, the biggest drop since they were issued in 2016, according to Trace bond price data. In April, a lawyer for Toys told the judge overseeing the company’s bankruptcy that it had multiple bids worth more than $1 billion for the Asia business. Toys owns nearly 85 percent of the venture and Fung owns the rest. Read more. 

Need more insight into credit bidding in bankruptcy? Pick up a copy of ABI’s Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors. 

The owner of New York’s Flatiron Hotel filed for bankruptcy yesterday with a plan to sell a 50 percent stake in the boutique hotel to an affiliate of Uzi Ben Abraham’s real-estate investment company Premier Equities, WSJ Pro Bankruptcy reported. The 62-room hotel’s owner, a company called 1141 Realty Owner LLC, filed for chapter 11 protection in U.S. Bankruptcy Court in New York. The hotel is owned — through a series of interlocking companies — by Jagdish Vaswani. The hotel owner filed for bankruptcy after Wilmington Trust, as the trustee for the lenders, said that it had defaulted on a $22.5 million loan. Wilmington Trust had sued Flatiron last year in federal court, claiming the hotel had defaulted on its loan by selling alcohol without a license and misappropriating funds.