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Briggs & Stratton Corp.’s unsecured creditors will receive 7 cents to 10 cents on the dollar depending on when the company completes its bankruptcy court-approved sale to KPS Capital Partners, the Milwaukee Business Journal reported. The final amount will depend partly on how quickly Wauwatosa-based Briggs can complete its sale to the New York City private equity firm. The sooner the sale is transacted, the more money will be available, said attorneys for Briggs & Stratton and its unsecured creditors committee. “The unsecured creditors are not getting huge returns,” Robert Stark, the lead attorney for the unsecured creditors' committee, said yesterday during a hearing on the sale plan. Bankruptcy Judge Barry Schermer presided over the hearing yesterday morning and on approved the plan in the afternoon. Briggs & Stratton reached agreements with its unsecured creditors' committee and the Pension Benefit Guaranty Corp. prior to the hearing that cleared the path for Judge Schermer’s approval. Judge Schermer's approval of the plan will allow Briggs & Stratton and KPS to proceed with the transaction they announced July 20 when Briggs filed for chapter 11 bankruptcy. The sale will be completed the week of Sept. 21, said Ronit Berkovich, an attorney for Briggs. The funds available to unsecured creditors will range from $35 million to $45 million, assuming the sale closes swiftly, Stark said. That would yield payments of 7 cents to 8.4 cents on the dollar, he said. Read more. 

Berkovich will be among the speakers at the Insolvency 2020 Virtual Summit kicking off today. Click here for more information and to register. 

When Forever 21 Inc. sold itself out of bankruptcy this year, it left behind hundreds of millions of dollars in debt owed to suppliers, shippers and landlords. Now, as they seek to get repaid by the fast-fashion chain’s estate, it’s becoming clear that they’re in for some serious pain, Bloomberg News reported. The U.S. Department of Justice’s bankruptcy watchdog is urging the judge overseeing the shell company’s case to convert it to a chapter 7 liquidation from a chapter 11 reorganization, estimating that high-ranking creditors owed some $250 million will likely only get 17 percent of that money back, or less than $50 million, according to court papers. The estate’s lawyers concede that the bankrupt entity is deeply insolvent, but oppose the U.S. Trustee’s attempt to convert the case to a chapter 7, court papers show. The conversion would complicate its efforts to maximize the entity’s remaining value, including efforts to sell a warehouse for $15.2 million and $24.3 million of tax refunds under the CARES Act, according to court papers. A hearing on the attempt to convert the case to chapter 7 is scheduled for today.

Consumers likely boosted U.S. retail spending in August for the fourth month in a row, but at a slower pace than earlier in the summer as the country continued to struggle with the coronavirus pandemic, the Wall Street Journal reported. Economists surveyed by the Journal forecast that retail sales increased a seasonally adjusted 1.1 percent in August from a month earlier. That would mark a slight cooling from the 1.2 percent increase recorded in July. Retail spending has continued to recover from the economic shock created by the pandemic, surpassing prepandemic levels in July. “It’s going to be tough to make further gains because levels are already pretty robust,” Stephen Stanley, chief economist at Amherst Pierpont Securities said, referring to retail sales. Other parts of the economy are also digging back, though at different speeds. Industrial production increased in August for the fourth straight month, but remains well below levels seen before the pandemic. Employers have continued to add jobs across industries, but there are still 11.5 million fewer jobs than in February and the unemployment rate of 8.4 percent is well above the 3.5 percent level from before the pandemic.

GNC Holdings Inc. is moving ahead with a sale to China’s Harbin Pharmaceutical Group Co. after no other offers emerged, even as the deal drew scrutiny from Sen. Marco Rubio (R-Fla.), WSJ Pro Bankruptcy reported. The vitamin retailer said yesterday that it was canceling a bankruptcy auction and proceeding with a sale of its assets to Harbin for $760 million. Rubio last week asked Treasury Secretary Steven Mnuchin for a review of the deal by the Committee on Foreign Investment in the U.S. Known as Cfius, the Treasury-led panel vets acquisitions of American companies that might put national security at risk. The senator argued that through the deal, the Chinese government could gain access to sensitive health data about U.S. consumers. Harbin, one of China’s largest drugmakers, is already GNC’s biggest shareholder, with a stake of about 40 percent. A GNC spokesperson said Harbin’s 2018 acquisition of the stake was reviewed by Cfius and the panel made no objections then. GNC filed for bankruptcy in June, slammed by plummeting sales as a result of coronavirus-related store closures and facing debt payments. The company had planned to either sell itself or reorganize in bankruptcy under the ownership of its lenders. Harbin’s $760 million offer for GNC will cover only part of the company’s $903 million in bank and bond debt.

Town Sports International Inc, the owner of New York Sports Clubs, filed for chapter 11 protection today after the coronavirus pandemic forced its gyms to close and caused revenue to dry up, Reuters reported. The company’s assets and liabilities were in the range of $500 million to $1 billion, according to a court filing in the U.S. Bankruptcy Court in Delaware. Gym operators have suffered as the pandemic deprived them of the monthly membership and personal training fees that generate much of their revenue. Gold’s Gym International Inc. filed for bankruptcy protection in May, followed by 24 Hour Fitness Worldwide Inc in June. As of March 31, Town Sports operated 185 fitness centers, including 99 New York Sports Clubs, with about 580,000 members. Its brands also include gyms in Boston, Philadelphia and Washington, D.C. named for those cities, as well as Lucille Roberts and Total Woman Gym and Spa. 

Women’s clothing chain J. Jill Inc. said it has obtained a consent from lenders to extend certain maturities of its term loans, helping the struggling retailer avert a bankruptcy filing, Bloomberg News reported. J. Jill had said previously that it planned to seek chapter 11 protection if it didn’t secure the necessary consents. The company said in a statement that the agreement provides it with additional liquidity and financial flexibility to meet its obligations. The company received permission from lenders holding 97.8 percent of its term loans to proceed with the out-of-court financial restructuring transaction, which extends the maturity of the term-loan debt to May 2024. The transaction is expected to close on or about Sept. 30. J. Jill earlier this month struck a deal with lenders holding 70 percent of the debt to extend certain maturities to 2024, grant a financial covenant holiday and provide for at least $15 million of new cash in the form of a junior term loan. The chain on Friday recorded a narrower loss for its fiscal second quarter, which included an almost 50 percent sales decline. The COVID-19 pandemic forced the Quincy, Massachusetts-based company to temporarily close its more than 280 U.S. stores in March. Lenders agreed to hold off on taking immediate action against the company after it violated terms of its loans, J. Jill said in a June news release. 

The U.S. operator of French bakery chain Maison Kayser has filed for bankruptcy with a plan to sell its New York City locations to an affiliate of restaurant operator Aurify Brands LLC, subject to better offers at auction, the Wall Street Journal reported. The operator, Cosmoledo LLC, and its affiliates filed for chapter 11 protection on Thursday in the U.S. Bankruptcy Court in New York shortly after notifying the Labor Department that it was laying off more than 700 employees that had been furloughed because of the coronavirus pandemic. Cosmoledo had operated 16 Maison Kayser locations in New York. Aurify’s offer could be valued at as much as $10 million. If the deal goes through, Aurify doesn’t intend to continue operating Maison Kayser but would instead take over the bakery’s former locations to expand its other chains. New York-based Aurify operates restaurant brands including the Little Beet, Melt Shop, Fields Good Chicken as well as Five Guys franchises. The company in May agreed to buy the U.S. division of Belgium-based bakery chain Le Pain Quotidien out of bankruptcy.

Hertz Corp. should be blocked from paying as much as $5.4 million to 14 top executives because the proposed bonus program would “potentially squander limited resources,” a group of retired company managers said in court papers, Bloomberg News reported. Paying top managers a bonus while in bankruptcy may make it impossible for Hertz to honor the $5.6 million in deferred compensation owed to the seven retired executives, including the car renter’s former general counsel, Paul M. Tschirhart, according to the objection filed in U.S. Bankruptcy Court in Wilmington, Delaware. The bonus program is “a fairly transparent attempt to continue doling out cash in a manner similar to the $16.2 million that already has been bestowed upon favored employees,” the employees said, referring to payments Hertz made to top executives just before it filed bankruptcy in May. 

Sur La Table is will close 73 stores as it restructures following bankruptcy proceedings, FoxBusiness.com reported. Asset disposition firm B. Riley’s Great American Group announced 17 additional store closings on Friday on top of the 56 Sur La Table had previously planned. The Seattle-based high-end kitchenware store will hold liquidation sales at the closing store locations, offering discounts of as much as 30 percent off original prices, according to the announcement. The sales are expected to last about five weeks, or until all the merchandise is sold. Retail furniture, fixtures and other equipment will also be sold at some locations. Sur La Table struggled as the coronavirus pandemic kept shoppers home. The company laid off about 20 percent of its staff in June and filed for bankruptcy protection in July.