Golfsmith International Holdings LP filed for Chapter 11 protection in the United States Bankruptcy Court for the District of Delaware on Thursday, one day after it’s Canada-based business, Golf Town, received similar relief from the Ontario Superior Court of Justice under Canada’s Companies’ Creditors Arrangement Act.
The orders issued by the Bankruptcy Court and the CCAA Court will help Golfsmith continue its business in the normal course while Golfsmith works to achieve long-term financial stability through the implementation of various transactions aimed at maximizing value for its stakeholders.
Importantly, the Bankruptcy Court and CCAA Court granted Golfsmith approval to access up to $135 million in debtor-in-possession (“DIP”) financing, which will be used to support the businesses during the court-supervised process and allow Golfsmith to pay its vendors in full under normal terms on a go-forward basis.
The Bankruptcy Court and CCAA Court also approved motions giving Golfsmith the authority to, among other things, pay employee wages and benefits without interruption, honor gift cards and customer deposits, and continue its current cash management system in the ordinary course. Golfsmith fully expects that its day-to-day operations will continue without interruption throughout the restructuring process.
“The Bankruptcy Court and CCAA Court’s approval of the relief requested by the company is another positive step forward in our efforts to restructure our businesses, and to continue operations in the ordinary course for the benefit of a broad range of stakeholders, including customers, employees, and vendors,” said David Roussy, Chief Executive Officer of the Golfsmith.
2016 has been a rough year for sporting goods retailers in the U.S.
In April, Sports Authority filed for Chapter 11, and decided in May to liquidate. Its URL is now owned by Dick’s Sporting Goods.
Also in April, Vestis Retail Group filed for Chapter 11, and announced it would shutter its Sports Chalet chain.