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Sears Holdings Corp. is facing a familiar foe in its bid to sell off the Kenmore appliances brand: the U.S. government body that oversees the pensions for the company’s 100,000 retirees, Reuters reported. Sears Chief Executive Eddie Lampert’s hedge fund, ESL Investments Inc, submitted bids last week of $400 million and $70 million for Kenmore and the department store’s home improvement business, respectively. ESL hopes to have a final agreement as soon as Aug. 24, which would end Sears’ nearly two year search for a buyer. It is unclear if the Sears special committee selling the businesses will accept Lampert’s offer. Lampert’s strategy in bidding for the two businesses is to entice another potential buyer to the table, according to a person familiar with his thinking. Barring that, the goal is to help the 125-year-old department store operator continue to fund its operations as it faces a cash crunch, the source said. But the government agency known as the Pension Benefit Guaranty Corporation (PBGC) plans to use its right to effectively veto the Kenmore sale in order to negotiate a share of the anticipated proceeds from Sears.

The private equity owners of Toys “R” Us may be taking unprecedented steps toward supporting the company’s former workers, but the lenders that financed its bankruptcy — and ultimate liquidation — are making no such promises, Bloomberg News reported. Angelo Gordon & Co. LP and Solus Alternative Asset Management don’t plan to contribute any more cash to benefit Toys “R” Us employees who were left jobless when the biggest U.S. toy retail chain shut down, according to an Aug. 21 letter reviewed by Bloomberg. The letter from lawyers at Wachtell, Lipton, Rosen & Katz came in response to two worker advocacy groups who asked the hedge funds last month “to take responsibility by ensuring that Toys “R” Us employees receive the money that they had been counting on.” In court, the defunct chain’s 33,000 workers have been seeking the same treatment as creditors, who customarily are given high priority under the Bankruptcy Code because their services are considered crucial to winding down a company. They’ve been competing for a the shrinking pool of cash left at Toys “R” Us with traditional administrative creditors, who would likely oppose the effort since they’d be less likely to get full payment on their own claims, and there’s already doubt about whether there’s enough to go around even before the workers are considered.

Second Avenue Capital Partners, LLC, announced it has provided a $12 million revolving line of credit to A'GACI, LLC, a young women's lifestyle brand and fast fashion retailer, according to a press release. Proceeds from the credit facility will be used as exit financing, enabling A'GACI's emergence from bankruptcy. A'GACI will be led by managing partner David Won, who co-founded the company with his brother John. 

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.

A buyer financed by the private investment firm of Michael S. Dell boosted its bid at the last minute to win the most valuable properties of bankrupt retailer Toys “R” Us Inc. in a court-managed sale, Bloomberg News reported. A joint venture between Saadia Group and Square Mile Capital used a $120 million loan from MSD Partners to convince a bankruptcy judge to accept its bid for two of Toys “R” Us’s distribution centers over a competing offer from Isaac Larian, the chief executive of toymaker MGA Entertainment. The Saadia venture will pay $177 million for the properties in California and New Jersey, which a Toys “R” Us lawyer called the most valuable real estate owned by the retailer’s U.S. business.

Acon Investments LLC, the buyout firm that owns a bankrupt Applebee’s franchisee, wants to recapitalize the restaurant operator while also leaving the door open for a new bidder to emerge in the chapter 11 proceedings, a lawyer for the franchisee said, the Wall Street Journal. The disclosure came during a hearing yesterday in U.S. Bankruptcy Court in Wilmington, Del., during which RMH Franchise Holdings Inc. faced off against Bank of America NA, which leads a group of secured lenders. The bank said last week that the restaurant operator, which sought protection from creditors in May, should put itself up for sale immediately before it gets to use any more cash to run its business. Bank of America previously consented to three earlier requests for RMH to use cash. By the end of the hearing, Bank of America and Atlanta-based RMH ultimately came to an agreement allowing the company to continue to use “cash collateral” through the end of August, at which point the company expects to have filed both a proposed plan of reorganization and bid procedures for outside parties interested in buying its assets.

FullBeauty Brands Inc., the New York-based online and catalog retailer of plus-size apparel, recently hired financial adviser PJT Partners Inc. to address its debt load, WSJ Pro Bankruptcy reported. The retailer, owned by Apax Partners LLP since 2015, saw revenue slide by 6 percent last year and 3.5 percent in the first quarter of 2018, according to Moody’s Investors Service. FullBeauty has faced increasing competition from online retailers such as Amazon.com Inc. as well as traditional retailers such as J.C. Penney Co., which have expanded their plus-size offerings. FullBeauty is struggling with $1.13 billion in debt, which could be unsustainable, given the recent erosion in revenue. The company’s interest expenses are high at close to $100 million a year, according to Moody’s.

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.

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.