LNT stalking horses hard to find
August 8, 2008,
Wilmington, Del. — Perhaps it’s just another sign of tough economic times, but bankrupt specialty retailer Linens ’n Things has put off a hearing to set bid protections for a stalking horse bidder on its second round of store closings — because there still was no stalking horse by late this week.
The hearing, originally scheduled yesterday, was put off until Monday, Aug. 11. Bid procedures were already approved. The protections would have set break-up fees and expense reimbursement for a stalking horse, intended to draw other bidders into a competitive auction to liquidate the stores.
In LNT’s first auction — a 120-store going-out-of-business event — a joint venture of SB Capital and Tiger Capital formed the stalking horse, providing a guaranteed minimum bid with a revenue split with LNT over minimums. There were at least two other competitors to become the stalking horse in that instance.
An additional group of 57 stores is being closed in the second round of liquidations.
LNT was able to sell off just five of the initial 120 closed store leases during an auction in late July, according to court documents. It is unclear if that auction result influenced the company’s decision to scale back the second round of closings from the original 87 that had been announced to 57. With the change, the total count of stores to be closed numbers 177.
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