NEWS

Sports Authority Bankruptcy Auction Won by Trio of Liquidators

Wednesday, May 18, 2016

A consortium of liquidators that includes Tiger Capital Group, Hilco Global and Gordon Brothers prevailed in an auction for Sports Authority Holdings Inc.’s assets, according to people familiar with the matter.

The winning bidders topped a rival offer from a second group of liquidators that included Yellen Partners, SB Capital Group and 360 Merchant Solutions. Great American Group, originally a part of this group of liquidators, dropped out of the consortium before the bidding began, two people familiar with the auction said.

The winning group agreed to pay 101% of the cost of the retailer’s inventory, plus a $1.8 million augment guarantee, a person close to the situation said.

A spokeswoman for Sports Authority wasn’t immediately available for comment.

Other offers ahead of the auction came from competitors Modell’s Inc. and Dick’s Sporting Goods Inc., each for small batches of stores, the people said. An auction for the retailer’s store leases will be held at a later date that has yet to be set, the people said.

On Tuesday, Dick’s increased the number of stores on which it would bid to about 30 locations, people familiar with the matter said.

In total, there are about 80 store leases that have received bids, with other retailers such as Bob’s Discount Furniture LLC and Orchard Brands Corp., making offers for small sets of locations, one of the people added.

Early in the bankruptcy proceedings, Dick’s Sporting Goods and Modell’s were said to be interested in larger lots of the stores, but their actual offers received last week were surprising, the people said.

A person close to the matter added that Modell’s was thought to be the “white knight” for Sports Authority, but its small bid proved disappointing. As of last Thursday Modell’s offer was just for a handful of stores, but there is a possibility the number could increase as it did for Dick’s, the person added.

Sports Authority has already started liquidating 140 of its 450 stores through sales run by Tiger Capital and Gordon Brothers. Additional Sports Authority auctions, including the sale of the retailer’s name and intellectual property, will run through May.

PDB Sports Ltd., owner of the Denver Broncos professional football team, and Stadium Management Co. LLC, the stadium manager, are balking at what they say is Sports Authority’s unauthorized attempt to sell its naming rights to the Broncos’ stadium—Sports Authority Field at Mile High. Sports Authority is also on the hook for a quarterly payment of more than $1 million to Broncos ownership as of May 1.

When Sports Authority initially filed for bankruptcy protection, the company had high hopes of reorganizing. However, just a few months after the filing and rising tensions with vendors, landlords and creditors, the company’s attorney said it was throwing in the towel and hoping for a robust auction.

 

Source : wsj.com

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