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Jeff Stollenwerck, a 15-year veteran of Sears Holdings Corp. and president of its real estate business, will soon be departing the U.S. department store operator, Reuters reported. Stollenwerck’s departure comes as billionaire Sears CEO Eddie Lampert said in a letter this week that his hedge fund, ESL Investments Inc., would be interested in acquiring the struggling retailer’s real estate, including its $1.2 billion in debt, Kenmore appliances brand and parts of its home services business. Stollenwerck was instrumental in Sears’ real estate financings and deals, which over the years included a spin-out of its 235 best properties into a publicly traded real estate investment trust, Seritage Growth Properties, some of which the retailer then leased back. Read more. 

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

Charming Charlie yesterday announced that it has successfully completed its financial restructuring and emerged from chapter 11 protection, according to a press release. The company's court-confirmed reorganization plan went into effect yesterday, and Charming Charlie is emerging with an improved financial position and capital structure. Kirkland & Ellis LLP served as the Company's legal counsel, AlixPartners LLP served as its restructuring advisor, and Guggenheim Securities, LLC served as its investment banker.

Toys “R” Us Inc. is winding down its business, but the retailer still has a lot of moving parts to deal with before it closes its doors in the U.S. for good, WSJ Pro Bankruptcy reported. At a hearing in the U.S. Bankruptcy Court in Richmond, Va. on Tuesday, Toys “R” Us’s lawyers mapped out the end game for the company. The company’s recent focus has been on reaching a resolution with merchandise vendors, a group that stands to lose approximately $800 million as a result of Toys “R” Us’ rapid liquidation. The vendors are posing an obstacle to Toys “R” Us’ wind-down procedures, filing numerous objections as the likelihood of receiving payments remains unclear. Toys “R” Us attorney Joshua Sussberg said yesterday that it’s still unclear how these vendors will be paid, but the company has been in discussions with vendors, creditors and lenders in hopes of reaching a global resolution. Compromises have already been reached as the groups work toward a resolution, court papers show, although any deals are still subject to court approval. Among the compromises, the retailer has proposed that “at least some funds will be carved out and set aside” for the benefit of the post-bankruptcy merchandise vendors. In addition, the carve out — somewhere between $150 million to $160 million — comes without releases of past, present or future claims against the company, management, lenders or other interested parties.

Edward Lampert is once again carving up Sears Holdings Corp. in a bid to save his retail empire, offering to purchase the Kenmore appliance brand and other Sears units after the struggling company was unable to find other buyers, the Wall Street Journal reported. The Sears chief executive, through his hedge fund ESL Investments Inc. which currently owns a controlling stake in the retailer, said in a letter to the Sears board that ESL is willing to submit proposals to buy the Kenmore brand, Sears Home Services’ home improvement business and the company’s Parts Direct business. Sears has been exploring strategic options for the units for nearly two years, but Lampert said in his letter that it has been unable to find a buyer. The moves are an effort by Lampert to inject cash into Sears and stave off a bankruptcy filing, while at the same time allowing the hived-off businesses to grow by distributing their products and services beyond Sears and Kmart. Some critics, however, have argued that the strategy further weakens Sears by giving shoppers less reason to visit the retailer.

The demise of Toys “R” Us Inc. took a toll on Hasbro Inc. last quarter, but the toymaker says the worst is behind it, Bloomberg News reported. Hasbro posted declining sales in all business areas, after the world’s largest toy chain announced the liquidation of its operations in the U.S. and U.K. Hasbro’s shares initially declined, only to rebound after Chief Executive Officer Brian Goldner told investors the impact would lessen going forward as retailers, such as Walmart Inc. and Target Corp., likely expand their toy offerings. Hasbro reiterated yesterday that free-cash flow this year would be $600 million to $700 million and that operating profit would be at the same level, a positive sign. Goldner also said the company stopped shipping to Toys “R” Us in January and that the liquidation of the chain’s U.S. stores will be completed this quarter.

Toys “R” Us Inc. is moving closer to selling parts of its North American and international businesses, the WSJ Pro Bankruptcy reported. The retailer said in court papers that it plans to sell its Canadian operations to Fairfax Financial Holdings Ltd., were solidified after it failed to receive higher qualified bids for the assets. The auction yesterday was canceled as a result. Fairfax, the Toronto-based investment firm controlled by financier Prem Watsa, has offered to pay 300 million Canadian dollars ($233.5 million) for the business, which includes 82 stores and intellectual property. However, neither Fairfax nor any other bidder has stepped forward to buy Toys “R” Us’ 200 best performing Toys “R” Us and Babies “R” Us stores. When Toys “R” Us said it would wind down its U.S. business and liquidate its more than 700 remaining stores, it floated the idea that 200 of its best stores could be saved. The option to acquire the 200 U.S. stores was a part of the Canadian asset sale. The company has yet to receive any qualified bids for the U.S. stores.

Canada’s Fairfax Financial Holdings Ltd. has offered to buy Toys “R” Us’s Canadian stores out of bankruptcy for $300 million, WSJ Pro Bankruptcy reported. The offer, revealed on Thursday in filing in U.S. Bankruptcy Court in Richmond, Va., is subject to higher bids at a court-supervised auction. The sale would also include the Canadian business’ intellectual property, including its brands. The retailer is seeking court approval to name Fairfax, the Toronto-based investment firm controlled by financier Prem Watsa, as the stalking horse, or lead bidder, at the auction. Companies selling assets in bankruptcy often seek to name a stalking horse to set a floor price to encourage bidding. In addition to the 82 Canadian stores, Toys “R” Us has put the option to buy 200 of its best performing Toys “R” Us and Babies “R” Us U.S. stores on the table. Fairfax’s offer is solely for the Canadian stores, however. An auction for the retailer’s Canadian assets is scheduled to be held Monday in New York at the offices of Toys “R” Us’s bankruptcy lawyers. A sale hearing is slated for Tuesday. Read more.

In related news, Irish toys group Smyths Toys has signed a deal to take over Toys “R” Us in Germany, Austria and Switzerland, the German arm of the insolvent retailer said on Saturday, Reuters reported. Once the largest U.S. toy retailer, Toys “R” Us abandoned a plan to emerge from bankruptcy last month and said it would try to maintain more profitable locations in Europe and Asia as an on-going business while liquidating its U.S. and UK operations. Family-owned Smyths will acquire 93 shops and four online stores via the planned deal, Toys “R” Us said in a statement on its German website. Financial details were not disclosed. The Irish company, which runs 110 stores plus websites in Britain and Ireland, plans to take on all the Toys “R” Us units, staff and management in Germany, Austria and Switzerland. Read more.