Linens ‘n Things has scheduled a May 29 auction for the liquidation rights to the approximately 120 stores it will close in connection with its Chapter 11 bankruptcy, even as creditors line up to be heard over the auction procedures and agency agreement.
In the meantime, the troubled 589-unit retailer reports that a “significant number” of vendors have resumed shipping on terms, although the company has yet to identify which suppliers and under what terms. Those moves come as suppliers are still assessing LNT’s debtor-in-possession credit facility and, in some cases, are seeking credit insurance or factoring for those shipments.
Speculation continues to fly concerning potential bidders for LNT’s total business. Late last week an executive for GHCL, the Indian parent of Dan River — which is now in liquidation — flatly denied that that company was in talks to acquire Linens ‘n Things. The same media reports from business outlets in India identified Welspun as another possible suitor.
“This is a rumor only,” B.G.K. Nair, general manager of corporate sales and marketing, GHCL, said from the company’s corporate headquarters in Noida, India. We are not [seeking to acquire] them.”
It was GHCL chairman Sanjay Dalmia who broadly hinted two years ago that his firm might be interested in an American specialty textiles retailer with all the attributes of LNT. It is unknown if there were ever any serious discussions.
Welspun USA coo and evp Charles Gaenslen said, “We are not in the market to buy LNT or any other U.S. retailer.”
Reports through the industry and financial circles suggested that LNT’s controlling shareholder, Apollo Management, might be continuing to buy up the retailer’s debt paper in a bid to improve its standing against other secured noteholders. Those reports could not be confirmed, although that is similar to the strategy used by financier Carl Icahn in his successful 2005 bid for WestPoint Stevens out of bankruptcy. (His victory, however, is still being challenged in court years later by other secured creditors.)
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