Sports Authority, still seeking buyer, says it’s not liquidating

Sports Authority Inc., still seeking a buyer, has no current plan to liquidate, a lawyer for the bankrupt retailer said.

“Liquidation is not in our vocabulary,” Robert Klyman of Gibson, Dunn & Crutcher LLP, who represents the ailing sporting-goods chain, told U.S. Bankruptcy Judge Mary Walrath Tuesday in Wilmington, Del.

That doesn’t mean the company has found a committed buyer for some of its more than 450 locations. Klyman told the judge that a “stalking horse,” who would set the floor in any asset auction, hasn’t been designated.

“We hope to have material parties coming in to bid,” he said.

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Sports Authority filed for bankruptcy court protection in March, saddled with debt piled up from a $1.3 billion buyout 10 years ago. At the time of filing, the Englewood, Colo.-based retailer announced plans to slim down and continue operating after exiting Chapter 11.

Still, if no viable bids come in by next week’s deadline, the chain could face liquidation.

An asset auction is set for May 16, as is a separate auction for about 140 leases on stores the company does intend to liquidate. At that sale, two bidders will compete for some of those leases, according to court papers Sports Authority filed Tuesday.

Meanwhile, R.I. Attorney General Peter F. Kilmartin suggested that consumers who have a Sports Authority gift card or store credit should “use it before it loses its value.”
Sports Authority has three locations in Rhode Island: Warwick, Middletown and Narragansett. It also has a store in Mansfield, in Massachusetts.
While those stores were not included in the store closing announcement, Kilmartin said it’s possible they still may close.
Kilmartin also suggests consumers return any unwanted items before the stores close or change return policies, and to inquire as to what will happen to warranties purchased through the retailer.
He said that consumers may see deep discounts on items sold at Sports Authority before the stores close, but they should understand the return policy before making the purchase.

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