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Edward Lampert, the billionaire who led Sears Holdings Corp. into bankruptcy, has increased his offer to more than $5 billion, in a last-ditch effort to keep the ailing retailer alive, WSJ Pro Bankruptcy reported. Lampert’s hedge fund, ESL Investments, yesterday unveiled the details of his new "going concern” bid, which includes a $600 million increase over an earlier offer, in a regulatory filing. Much of the additional $600 million is earmarked for the retailer’s vendors and to pay property taxes. Sears, which filed for chapter 11 protection in October, plans to hold a court-supervised auction on Monday that will determine whether what is left of the 126-year-old chain is liquidated or left in Lampert’s control. The retailer’s creditors want to wind down the business, but the hedge fund manager-turned-CEO wants to keep more than 400 stores open.

Gymboree, the U.S. children’s clothing chain that emerged from bankruptcy less than 18 months ago, is within days of filing for chapter 11 protection once again, the Financial Times reported. Record-breaking holiday sales that have helped much of the U.S. retail industry have failed to revive the fortunes of the company, which operates about 900 stores across North America. Gymboree, which was bought by private equity group Bain Capital for $1.8 billion in 2010, is one of several retailers that has run into trouble after being laden with debt in a leveraged buyout. The company had used its earlier bankruptcy to shed more than $900 million of debt. Daniel Griesemer, former chief executive, said at the time of the restructuring that it would secure “the company’s long-term financial health.” But trading has continued to be tough for the company, one of the people familiar with the matter said. The San Francisco-based group said last month that it had begun to review “strategic options” for its Gymboree, Crazy 8 and Janie and Jack brands.

The judge presiding over Nine West Holdings Inc.’s bankruptcy authorized the company to borrow another $22 million after it reached an agreement with junior creditors who are challenging its chapter 11 exit proposal, WSJ Pro Bankruptcy reported. Bankruptcy Judge Shelley Chapman approved the financing during a hearing Thursday in the U.S. Bankruptcy Court in New York after low-ranking creditors who had initially opposed the loan proposal acquiesced. The new loan from Nine West’s term lenders comes on top of a $300 million debtor-in-possession package they have already extended to keep the shoe and accessories retailer operating while it restructures its debts. The additional liquidity is designed to keep Nine West afloat while it battles with junior creditors over the terms under which it can emerge from court protection. A trial on the company’s contested bankruptcy exit plan is scheduled to begin Jan. 28.

Some Sears Holding Corp. partners have come out in support of a proposal by Eddie Lampert’s hedge fund that would avoid liquidating the department-store chain and keep stores open, according to a court filing, Bloomberg News reported. Vendors that are owed money for goods shipped to Sears within 20 days of the retailer’s bankruptcy, including furniture company Mien Company and apparel distributor Strong Progress Garment Factory Co., support the bid because they don’t think the retailer’s wind-down fund has enough money to pay their claims, according to a court filing. The merchants “believe the bid of ESL Investments provides them with the best chance to be paid in the fastest manner,” according to filing in federal bankruptcy court that was dated Jan. 7. “The Mien vendors do not want to see the debtors’ remaining stores liquidated.” Numerous vendors said they are willing to help out ESL’s bid by providing trade credit, according to the filing. “I’m hopeful for a last-minute reprieve. I don’t want to lose another customer,” said Joe Shamie, president of Delta Enterprise Corp., a Sears vendor that manufactures children’s furniture. Read more.

One of the worst outcomes for a business owner is having a major customer file for bankruptcy and leave behind a large unpaid account receivable. ABI's Business Creditor’s Guide to Distressed Vendors, Debt Collection and Bankruptcy provides an insider’s look into the options available to help screen a business’s customers, plan for worst-case scenarios, and, if the situation does arrive, efficiently handle the fallout. 

Gigi's Cupcakes, the well-known bakery chain formerly based in Nashville, has filed for chapter 11 bankruptcy protection in the Northern District of Texas, the <em>Nashville Business Journal</em> reported. Launched by Gigi Butler in 2008 with a single Midtown Nashville shop, Gigi's was sold in 2016 to FundCorp, a Texas-based private equity firm. On Jan. 4, chapter 11 petitions were filed on behalf of three Gigi's-related entities: Gigi's Cupcakes LLC, Gigi's Operating LLC and Gigi's Operating II LLC. Similar petitions were also filed for entities tied to Mr. Gatti's, an Austin-based pizza chain acquired by FundCorp in 2015. Separately, Gigi's has been engaged in a complex legal battle with several franchisees related to their franchise agreements. Actions filed by nearly 20 franchisees have been consolidated into one case, which remains on the docket in the Northern District Court of Texas. The most recent filing in the case is a stay of proceedings following the bankruptcy petition.

Billionaire Edward Lampert will get one last chance to keep Sears Holdings Corp. from closing down, after the retailer agreed to let its longtime leader compete in a bankruptcy auction that will decide the once-iconic department store’s fate, WSJ Pro Bankruptcy reported. Sears, which filed for chapter 11 protection in October, plans to hold a court-supervised auction on Monday that will determine whether what is left of the 126-year-old chain is liquidated or left in Mr. Lampert’s control. The retailer’s independent board members and creditors want to wind down the business, but the hedge fund manager-turned-CEO wants to keep 425 stores open. After Mr. Lampert promised to revise his proposal, a Sears lawyer yesterday told the judge overseeing the bankruptcy case that the company would move forward with the planned auction. If Sears had rejected Lampert’s bid, there would have been no auction and Sears would have begun to liquidate.

Beauty Brands LLC, a Midwest retail chain selling makeup, hair and skincare products, has filed for bankruptcy protection in hopes of salvaging at least some of its locations through a sale in chapter 11, WSJ Pro Bankruptcy reported. The Kansas City, Mo.-based retailer filed for chapter 11 protection Sunday in the U.S. Bankruptcy Court in Wilmington, Del., saying it owes at least $6.9 million on a secured loan and about $11 million to vendors, suppliers and other unsecured creditors. Beauty Brands cited declining sales, increased operating costs and an expensive rebranding at a handful of locations that have underperformed as causes for the bankruptcy filing. The retailer is backed by San Francisco-based private equity firm TSG Consumer Partners, court papers say.

Sears Holdings, which owns the Sears and Kmart retailers, likely will reveal today whether it will consider a controversial offer by its chairman and largest investor to keep a shrunken version of the company alive, USA Today reported. Without a deal, liquidation appears imminent. It could even proceed within weeks. The company filed for chapter 11 protection in October, hoping to use the debt-cutting process to rid itself of burdensome leases, financial liabilities and costs. That process has already involved hundreds of store closings for a company that once had more than 3,000 locations. With the company teetering on the edge of implosion, attorneys for Sears will appear before a federal bankruptcy judge in New York at 10 a.m. today to provide updates on the company's asset bidding process. The retailer received an acquisition offer from chairman and former CEO Eddie Lampert's hedge fund, ESL Investments, that would keep about 425 stores open and 50,000 employees working. 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. 

A long-standing liquidator is now first in line for one of the U.S. retail sector’s most daunting assignments: shutting down 126-year-old department store chain Sears Holdings Corp., Reuters reported. Sears has lined up Closter, N.J.-based Abacus Advisory Group LLC to sell the chain’s vast inventories of tools, appliances and store fixtures should negotiations with Chairman Edward Lampert over his $4.4 billion takeover bid end unsuccessfully. Lampert’s bid to rescue Sears through an affiliate of his hedge fund, ESL Investments Inc., has fallen short so far, the sources said. The billionaire and Sears are racing to resolve the bid’s sticking points before a Tuesday court date after negotiations dragged well beyond a Friday deadline, the sources said. The bid would preserve 425 Sears stores and up to 50,000 jobs across the United States, according to a letter delivered to Sears on Dec. 28. A liquidation would put roughly 68,000 people Sears now employs out of work.

Charlotte Russe Inc., a mall-based fast-fashion retailer, is reassessing its future, including a possible sale or bankruptcy, less than a year after reaching a deal with its lenders to slash debt, WSJ Pro Bankruptcy reported. The retailer recently hired Guggenheim Securities to explore strategic alternatives. The chain of more than 500 stores reached a restructuring deal with its lenders in February 2018 to cut its total debt load to $90 million from $214 million, slashing the company’s interest payments in half. The company believes it could avoid a chapter 11 filing if it can find a deal that would allow it to increase its size and scale, possibly through a sale to another retailer or through a partnership.