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Sports Authority Gets More Time to Formulate Bankruptcy Plan

Retailer's Name Could Stay Alive, As Modell's and Sports Direct Discuss Bidding on Store Leases Together
Sports Authority

PISCATAWAY, NJ–A British sporting goods retailer, and Modell’s Sporting Goods, could, in collaboration, acquire about 200 Sports Authority stores, sources have told the Wall Street Journal.

While Going-out-of-business sales were held ahead of Sports Authority store closings in Piscataway, East Brunswick, and Manalapan, there are still a handful of locations still operating in the Garden State, including Union, West Long Branch, Secaucus, Hazlet, Flemington, Mount Laurel, Ramsey and two in Paramus.

Sports Authority filed for Chapter 11 bankruptcy in early March and liquidation of all unsold retail inventory and other assets was expected to conclude by the end of next month, although the retailer has been hoping to sell its over-extended business. 

Any offers for Sports Authority store leases were due on June 23, while “stores with leases that go unsold are in danger of going dark,” according to a Journal report, which adds that a deal could be the final chance of saving any part of the embattled retailer or its business.

But on June 23, Sports Authority was granted a court order extending, until September 28, the time to file a plan describing what available proceeds it must distribute to creditors.

Still, the scheduled auction of its active store leases remains set for June 29.

"Once the adjourned main autction is held and the liquidation of the debtors' remaining retail inventory and other assest is complete, the debtors will be able to better determine what proceeds are available for distribution to their creditors and to formulate a Chapter 11 plan," attorneys for NJ-based Sports Authority said in the motion requesting the extension.

The British retailer, Sports Direct International PLC, New York-based Modell’s, and Englewood-based Sports Authority were not immediately available for comment. However, the talks could fall apart any time before June 23, one of the sources told the Journal.

“Landlords and other creditors are taking a wait-and-see approach to the possible deal, after a bankruptcy proceeding that has been marred by speculation about transactions that never came through,” reads Journal report.

Sports Authority settled about 160 lawsuits filed by its suppliers this month.  Their vendors wanted certain winter gear valued at some $85 million, among other merchandise being sold at Sports Authority locations, shipped back over concerns the retailer wouldn’t pay them for it.

The bankrupt retailer has as much as $643 million in debt, according to reports.

It's retained Hilco Streambank to sell some of its intellectual property, logos, brands, and naming rights for the Sports Authority Field at Mile High Stadium in Denver, Colorado.