January 31, 2019 – In a hearing held on January 31, 2019, the Court hearing the Bon-Ton Stores case granted the Debtors’ motion [Docket No. 1280] for entry of an order dismissing the Debtors’ Chapter 11 cases. Subject to the issuance of the Court’s order (a draft of which was submitted by Debtors’ counsel and which is attached to Docket No. 1432) the Debtors’ cases will be dismissed effective immediately. Counsel for the Debtors’ informed the Court that conversion to Chapter 7 had been considered in conjunction with the Debtors’ creditors committee and rejected in favour of dismissal. Counsel further advised that there simply remained no funds available to support a continuation of the cases. In a comment from the Judge that may be instructive to practitioners, there was one objection (amongst approximately 100 outstanding) that caught the Judge’s attention, a small claim from a non-profit. Stumped to remember the particular objection, counsel for the Debtors promised to make good on that one claim.
On February 4, 2018, Bon-Ton Stores and nine affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 18-10248. The Company, which operates department stores, is represented by Pauline K. Morgan of Young Conaway Stargatt & Taylor. The Company announced that it is currently engaged in discussions with potential investors and debtholders regarding the terms of a financial restructuring plan. The Company notes, “Bon-Ton intends to use this court-supervised process to explore potential strategic alternatives to maximize value for the benefit of its stakeholders, which may include a sale of the Company or certain of its assets as part of the plan of reorganization.” The Company’s stores, e-commerce and mobile platforms under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates are open and operating as usual. Bon-Ton Stores previously announced its intentions to close 47 retail store locations in 2018. The Company has received a commitment from its existing ABL lenders for up to $725 million in debtor-in-possession financing which, subject to Court approval, is expected to support the Company’s operations during the financial restructuring process. Bill Tracy, president and C.E.O., comments, “Bon-Ton has seven well-loved brands and associates who have remained committed to delivering excellent service to our customers for decades.”
Great American Group LLC and Tiger Capitol Group Acquire Inventory and Assets for $775.5mn
On February 17, 2018, Bon-Ton Stores announced the winning bid in an auction for the Company’s assets, held pursuant to Section 363 of the U.S. Bankruptcy Code. Subject to U.S. Bankruptcy Court approval, a joint venture composed of the holders of the Company’s 8.0% Second Lien Secured Notes due 2021 and Great American Group and Tiger Capital Group acquired the inventory and certain other assets of the Company for $775.5mn. Bill Tracy, the Debtors’ president and C.E.O., noted at the time, “While we are disappointed by this outcome and tried very hard to identify bidders interested in operating the business as a going concern, we are committed to working constructively with the winning bidder to ensure an orderly wind-down of operations that minimizes the impact of this development on our associates, customers, vendors and the communities we serve.”
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