Following its asset acquisition deal with Lowe's, Orchard Supply Hardware is moving forward with its effort to close underperforming stores and has won approval to seek bids from liquidators to hold going-out-of-business sales.
Bloomberg reported that U.S. Bankruptcy Judge Christopher Sontchi granted approval for a June 27 liquidator auction at a hearing Tuesday in Wilmington, Del. Orchard plans to close at least eight of its stores that are not due to return to profitability. The company also has the option to hold going-out-of-business sales at another of its 22 stores until July 31.
Liquidators Hilco Merchant Resources and Gordon Brothers Retail Partners have already jointly offered a 74% recovery on assets sold. Other liquidators will need to submit their bids by June 25, with the winner to be announced June 28.
Orchard would need to provide the joint venture with a $300,000 breakup fee in the event that it chooses a different liquidator, according to The Deal.
According to Bloomberg, Orchard Supply listed $441 million in assets and $480.1 million in debt in Chapter 11 papers filed Monday.