“It has become apparent that the debtors will not reorganize under a plan but instead will pursue a sale,” company attorney Robert Klyman told Judge Mary Walrath at a hearing Tuesday in U.S. Bankruptcy Court in Wilmington, DE.
The case is currently in Chapter 11, and could be transferred to Chapter 11 on May 3 to give creditors more time to decide whom they want to direct the liquidation: company management or an outside trustee, according to The Denver Post report. A May 16 auction is set for the bulk of Sports Authority’s operations.
Sports Authority filed for Chapter 11 protection in March to rework $1.1 billion of debt, with hopes of restructuring. It initially decided to close or sell 140 of its 464 stores in the U.S. and Puerto Rico, as well as distribution centers and warehouses in Denver and Chicago.
Merchants in the sporting good sectors have had a rough go of it lately. Earlier this month, Vestis Retail Group filed for Chapter 11 and announced it would shut down its Sports Chalet business.