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USA Discounters Ltd. made its debut in bankruptcy court Wednesday seeking to use its lenders' cash as the retailer winds down business amid a multistate probe into its business practices, Dow Jones Daily Bankruptcy Review reported today. The Norfolk, Va., company, a retailer accused of misleading U.S. service members, filed for bankruptcy protection on Monday and plans to liquidate its remaining assets and distribute the proceeds to creditors. Bankruptcy Judge Christopher Sontchi said that USA Discounters could use its lenders' cash to pay its remaining employees who are in charge of liquidating the retailer's remaining assets. Those assets comprise $114 million in accounts receivable and seven still-open Fletcher's Jewelers stores.

USA Discounters Ltd., a retailer accused of misleading U.S. service members, filed for bankruptcy protection and plans to wind down its business, the Wall Street Journal reported today. Until recently, USA Discounters sold furniture, appliances, electronics, jewelry and other products from stores located near military bases, often financing such purchases through its own credit program. The company cited the tough retail climate, a defaulted loan and various governmental actions regarding its operations as factors for the chapter 11 filing. Last year, the retailer agreed to pay a $50,000 civil penalty to the Consumer Financial Protection Bureau and to stop charging military customers a fee to obtain certain financial protections, following an investigation by the agency. USA Discounters didn’t admit or deny any wrongdoing. The company currently faces a multi-state investigation from several attorneys general into its business practices. In the bankruptcy papers filed on Monday, USA Discounters says that it is cooperating with the probe.

Three years after buying it out of bankruptcy, Versa Capital Management is seeking a new owner for the Avenue Stores LLC plus-size clothing chain, Bloomberg News reported yesterday. The investment bank Houlihan Lokey is running the sale process. Versa, a buyout firm in Philadelphia, turned around the once-struggling Avenue chain and is looking to capitalize on growing demand for plus-size clothing. Sales of the apparel totaled about $18 billion during the 12-month period ending in June, according to NPD Group. The market’s potential has attracted retailers like Target Corp., which rolled out a larger-size clothing line, Ava & Viv, this year.

American Apparel Inc. is seeking advisers to help craft a plan to restructure the company in bankruptcy court, Bloomberg News reported yesterday. The seller of T-shirts and casual-wear has made calls in recent weeks to advisory firms as it prepares to negotiate a bankruptcy loan with creditors to fund it through the process. The Los Angeles-based retailer said last week that it may not be able to continue its operations as a going concern for the next 12 months, even after lenders increased its credit line. A group of lenders, including American Apparel’s largest shareholder Standard General, boosted the credit line to $90 million from $50 million, according to a company statement.

Bankruptcy Judge Robert Drain said yesterday that Great Atlantic & Pacific Tea Co. could sell pharmacy assets at 12 of its in-store pharmacies to Rite Aid Corp. for $8.1 million, the Wall Street Journal reported today. The approval by Judge Drain means the closings of the pharmacies will begin today and last through the beginning weeks of September. Rite Aid is buying inventory and customer-prescription information from pharmacies at 12 of the 25 A&P supermarkets that are closing. As part of the deal, Rite Aid will notify customers in writing that their prescription information is being moved, a recommendation made by Elise S. Frejka, a consumer privacy ombudsman appointed in the case. A&P said in court papers last week that it received seven bids for pharmacy assets at 22 of the 25 stores it is immediately closing, and the Rite Aid deal was the only one that exceeded the $5 million threshold that requires Judge Drain’s approval.

Great Atlantic & Pacific Tea Co. wants fast court approval to sell off the assets of some of its in-store pharmacies to Rite Aid Corp. for up to $8.1 million, Dow Jones Daily Bankruptcy Review reported today. A&P said in a Thursday court filing that Rite Aid has agreed to buy inventory and customer-prescription information from pharmacies at 12 stores that are closing. Bankruptcy Judge Robert Drain has approved the grocer's request for a hearing today on the matter.

American Apparel Inc. has reached an agreement with creditors for a $90 million asset-based infusion, averting default, the Wall Street Journal reported today. Still, the retailer warned on Monday that a bankruptcy threat remains given its financial results thus far and its projections for the next four fiscal quarters. The retailer had warned last week it had about $13 million of available cash, roughly the amount of an interest payment due on Oct. 15 — and risked default unless it raised another cash infusion or refinance its debt. As of Aug. 11, the retailer said on Monday, it was down to $11.2 million in cash. The company, which has been staving off bankruptcy through a series of cash infusions, last amended its $50-million line of credit with Capital One in March, according to regulatory filings.

RadioShack’s creditors committee has secured court backing for a settlement with senior lenders that removes a potential impediment to approval of the company’s bankruptcy plan at a confirmation hearing next week, Bloomberg News reported yesterday. Separately, a hearing on a demand by Texas Attorney General Ken Paxton that holders of gift cards receive information from the court was rescheduled for Aug. 26, the date of the confirmation hearing. When RadioShack sold assets this year, including more than 1,700 stores to the Standard General hedge fund, senior lenders got $12 million from the proceeds. The money was put into escrow accounts for paying expenses and settlements of lawsuits in which the senior lenders have indemnification from RadioShack, which changed its name to RS Legacy Corp. after the sale. The unsecured creditors’ committee threatened to sue, claiming defects in the senior lenders’ lien package. By settling, lenders agreed to collect only from the escrow account in compensation for indemnification claims, in return for the unsecured creditors’ agreement not to sue.

American Apparel Inc. said that it may not be able to sustain operations as a going concern for the next 12 months, even after the clothing chain increased its credit line, Bloomberg News reported yesterday. A group of lenders, including hedge fund Standard General, replaced its $50 million credit facility with a larger $90 million one, the Los Angeles-based retailer said yesterday. The company said last week that Standard General intended to take this step. The clothing maker has been in turmoil since it suspended and then fired founder and Chief Executive Officer Dov Charney for alleged misconduct. Charney, who was replaced as CEO by Paula Schneider, has sued over his ouster and said the allegations against him are baseless. The retailer also yesterday confirmed second-quarter results that it reported on a preliminary basis last week. Sales sank 17 percent to $134.4 million, and the net loss expanded to $19.4 million from $16.2 million. As of Aug. 11, the chain had $11.2 million in cash. It has a bond-interest payment of about $13.9 million due on Oct. 15.

A judge on Monday held off ruling on whether Great Atlantic & Pacific Tea Co. can modify parts of its collective-bargaining agreements (CBAs) with unions, something the grocer has indicated would be the first step toward a more drastic overhaul of the CBAs, Dow Jones Daily Bankruptcy Review reported today. Bankruptcy Judge Robert Drain met with lawyers for the company and the unions after hearing testimony yesterday, and he later said that they should negotiate more and come back to court on Wednesday with a compromise. A&P wants to change a provision in the contracts that allows senior employees in stores that are closing to take the jobs of lower-paid employees with less seniority at other locations. The other change would cut the amount of severance pay A&P has to immediately pay to employees being laid off.