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Toys “R” Us Inc.’s U.S. business is in the midst of a wind-down, but its Asian business may have hope for survival, WSJ Pro Bankruptcy reported. The toy retailer has received multiple bids of more than $1 billion for a majority stake in its Asian business, the company’s bankruptcy attorney said yesterday in court. Interested bidders are looking to take an 85 percent stake in the Asian business. Bankruptcy lawyer Joshua Sussberg of Kirkland & Ellis updated the court on the status of the company’s Asian business during a hearing in which the Toys “R” Us won approval to borrow an additional $80 million under its bankruptcy loans to support its healthy overseas operations. Judge Keith Phillips of the U.S. Bankruptcy Court in Richmond, Va., gave interim approval for a higher debtor-in-possession loan, with a hearing for final approval set for April 27. The additional funds are needed to keep the toy retailer’s Central European and Asian units in business, lawyers for Toys ‘R’ Us and its creditors said at the hearing

The survival of Bon-Ton Stores Inc. suffered a blow yesterday when a bankruptcy judge denied bid-protection payments to a potential bidder that wants to keep the chain alive, WSJ Pro Bankruptcy reported. Judge Mary Walrath of the U.S. Bankruptcy Court in Delaware denied the payment of up to $500,000 to a group including New York investment firm DW Partners and landlords Namdar Realty Group and Washington Prime Group. The group had pledged to submit a bid that would keep Bon-Ton’s more than 250 stores alive. The payment would have been used toward paying the group’s fees and expenses related to the sale process. The lawyers pushing for the payment argued that the offer could keep up to 24,000 people employed. While Judge Walrath denied the payment, the consortium may still show up at Monday’s auction. DW Partners and the landlords submitted a letter of intent, which included a $128 million offer, with conditions that include the $500,000 payment and representations that some vendors are willing to stay on board with the company through its emergence. Read more. 

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here. 

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 now at the ABI Store. 

The number of retailers defaulting on loans hit a record high in the first quarter of 2018, a new report shows, affirming many chains in the sector are still struggling under suffocating debt loads and changing business needs, CNBC.com reported. There were 28 total defaults by corporations in the latest period, Moody's Investors Service found, compared with 23 defaults during the same period a year ago. "Stresses in the retail sector have weighed on the operating earnings of department stores, discount stores and drug stores in particular," said Sharon Ou, vice president and senior credit officer at Moody's. CNBC reported last month that Moody's is expecting retailers' maturities to spike in 2019, meaning many significant debts are coming due. Companies on that list with loans to pay include Sears, Neiman Marcus and Guitar Center. These companies are also targeted as ones that could struggle to refinance or fund their loans. Read more. 

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here. 

The company behind Waverly Restaurant, a legendary diner in New York City’s West Village that serves classic American-style comfort food, has filed for bankruptcy protection, the Wall Street Journal reported. Village Red Restaurant Corp., the diner’s corporate name, filed for chapter 11 protection on Friday in the U.S. Bankruptcy Court in New York. The restaurant is facing potential liability in two lawsuits alleging management didn’t pay overtime to a group of former waiters, dishwashers, busboys and delivery men. Filing chapter 11 bankruptcy halts the litigation and allows Waverly Restaurant to keep its doors open as it attempts to address its liabilities. The restaurant’s bankruptcy petition estimates it has up to $50,000 in assets and between $500,000 and $1 million in liabilities.

Struggling shoe retailer Nine West Holdings Inc. took its first steps under bankruptcy protection Monday during its debut hearing, WSJ Pro Bankruptcy reported. Bankruptcy Judge Shelley Chapman gave Nine West the green light to begin using its bankruptcy loan. Nine West’s $300 million bankruptcy financing package consists of two loans — a roughly $247.5 million loan from its prepetition bank lenders and a $50 million term loan from a group that includes Brigade Capital Management LP. The company will seek later approval to begin using the $50 million loan at its second-day hearing. The shoe retailer says that it plans to use the bankruptcy loan to repay some of its secured prepetition debt, as well as fund operations while under chapter 11 protection. Read more. 

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here. 

Bon-Ton Stores Inc. said yesterday that it received an acquisition offer from an investor group, two months after the department store chain filed for bankruptcy protection, Reuters reported. The investor group includes U.S. mall owners Namdar Realty Group and Washington Prime Group Inc., for whom Bon-Ton is a significant tenant, and credit-focused fund manager DW Partners. The York, Pa.-based retailer, with 23,000 employees and 256 stores across 23 states, filed for creditor protection in February and said that it was on track to close 47 stores in 2018 as conventional brick-and-mortar operators are struggling to adapt to rapidly changing consumer tastes and a rise in e-commerce. Bon-Ton Stores said it received a signed letter of intent from the investor group with the parties finalizing an asset purchase agreement before an auction to be held on April 16. A hearing on the bankruptcy-court supervised sale process is expected later in April, the company said. 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 now at the ABI Store. 

Retailer Nine West Holdings Inc., best known for selling women’s shoes and accessories, filed for chapter 11 protection Friday with a deal to sell its Nine West and Bandolino footwear and handbag businesses to a licensing firm, WSJ Pro Bankruptcy reported. The chapter 11 filing in U.S. Bankruptcy Court in New York comes as Nine West faced debt maturities and has seen its revenue dwindle. The retailer has reached a deal to sell its Nine West and Bandolino businesses to licensing firm Authentic Brands Group Inc., which has also acquired other bankrupt retail brands including Aéropostale Inc. and Frederick’s of Hollywood. Authentic Brands has agreed to pay $200 million for the intellectual property associated with the Nine West, Bandolino, and associated brands plus some working-capital assets, Nine West Chief Executive Ralph Schipani said in court papers. The deal comes after Nine West, which is owned by private-equity firm Sycamore Partners, recently closed its remaining 71 remaining stores, a Nine West spokeswoman said. Read more.

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here.

U.S. mall owners Namdar Realty Group and Washington Prime Group Inc. are in talks to acquire U.S. department store operator Bon-Ton Stores Inc. out of bankruptcy, Reuters reported. Namdar’s and Washington Prime’s bid for Bon-Ton offers a path for the retailer to survive, three sources said. Firms specializing in liquidation plan to submit a $740 million offer for Bon-Ton in partnership with its bondholders. If that bid were to prevail, the company would be dismantled Bon-Ton, which filed for bankruptcy in February with about 250 stores, is a significant tenant of both Namdar and Washington Prime malls. Its survival would help protect the value of these malls. Namdar plans to work with its partner, Mason Asset Management, which jointly invests with Namdar and manages its properties, on the bid. Bon-Ton extended the deadline for bids in its bankruptcy auction last week to yesterday, after announcing it was in active discussions with a bidder whom it did not identify. That bidder is the consortium of Namdar and Washington Prime. Read more. 

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here. 

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 for pre-order at the ABI Store. 

Accessories seller Charming Charlie LLC won court approval yesterday to move forward with its reorganization plan, allowing the chain to survive its bankruptcy proceedings, a rare achievement for a retailer in recent years, WSJ Pro Bankruptcy reported. “You’re performing a rather unusual task of reorganizing a retailer in 2017 and 2018,” Judge Christopher Sontchi said to attorneys in the U.S. Bankruptcy Court in Wilmington, Del. “I’m quite happy to enter an order confirming the plan.” Charming Charlie sought chapter 11 protection in December faced with a cash crunch and mounting debt load. Like many of its mall-based peers, the retailer blamed its woes on the major challenges facing the overall industry, namely the consumer shift to online shopping. Charming Charlie has closed more than 100 of its 375 stores in the U.S. and Canada since December. In the months leading up to the chapter 11 filing the company reached a restructuring pact with its lenders and backers, which include private-equity firms TSG Consumer Partners and Hancock Park Associates. The deal will see Charming Charlie’s lenders swap their debt for control of the company. Read more. 

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. To register for the Annual Spring Meeting, please click here.

Bankrupt women’s fashion and accessories retailer A’Gaci has canceled an auction of its assets that had been scheduled for today, saying that it received no qualified bids, the San Antonio Express-News reported. “Despite an active marketing process and due diligence from several potential buyers, no acceptable buyer emerged,” said Ian Peck, A’Gaci’s bankruptcy lawyer. “So the company decided to cancel the auction and not move forward with the sale process any further.” A’Gaci now is focused on developing a reorganization plan that will allow it to emerge from chapter 11 protection, he said. The retailer already has received support from various creditors regarding efforts to reorganize, he said. The company listed $37.3 million in assets and $54.7 million in liabilities in a February court filing. A’Gaci had no set minimum price when it solicited offers for the purchase of substantially all of its assets and liabilities, Peck said. No stalking-horse bidder was ever lined up. “You never want to schedule a party and then have no one come,” John Penn, a Dallas bankruptcy lawyer not involved in the case, said of the canceled auction. “You’re on a track for a sale and no one showed up to buy what you were selling.” Read more. https://www.expressnews.com/business/local/article/Bankrupt-retailer-A-…

A special episode of “Eye on Bankruptcy” focused on the next wave of retail cases will be taped before a live audience at the Annual Spring Meeting! Watch a preview. https://www.youtube.com/watch?v=lIcjsgpQ85I&feature=youtu.be To register for the Annual Spring Meeting, please click here. http://www.abiasm.org.