LNT GOB launches Friday, vendors likely to lose out
October 16, 2008-- Home Textiles Today,
Clifton, N.J. — The going-out-of-business sales to liquidate Linens ’n Things are slated to begin Friday and should be mostly done by Christmas, according to one of the liquidators.
“The plan is to start the sale tomorrow morning,” said James Schaye, ceo of Hudson Capital Partners, one of six liquidators that have joined to manage the process.
The plan was scheduled for approval by the federal bankruptcy court in Delaware yesterday; LNT filed a 32-week wind-down budget in preparation for the hearing, although that time period covers the company as a whole. Most of the stores will likely be shuttered by the holiday, or certainly by the end of January, according to Schaye and filings with the court.
The cost value of the merchandise is about $500 million — perhaps as much as $1 billion at retail. As the initial guarantee, the liquidators are scheduled to pay LNT $200 million today. Additional amounts will be paid against that sum as the sales progress. The cash will initially wend its way to LNT’s secured lenders, including General Electric Capital Corp., as well as the company’s noteholders.
With $650 million in secured debt outstanding, it is unclear whether unsecured trade creditors will make any recoveries.
Schaye said the fact that the sale is taking place during the fourth-quarter selling period is essentially immaterial.
“It doesn’t really matter. A going out of business sale is a going out of business sale,” he said. “It’s an opportunity for customers who are all challenged today and looking for deals to find exceptional deals. It’s plain and simple.”
In addition to Hudson, the joint venture liquidation group includes Gordon Brothers Retail Partners, Hilco Merchant Resources, SB Capital Group, Tiger Capital Group and Great American Group.
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