Big Lots Files Chapter 11
Big Lots has filed for Chapter 11 bankruptcy protection and agreed to sell its assets to Nexus Capital Management, according to a company press release made public just after midnight on Monday, September 9.
“The actions we are taking today will enable us to move forward with new owners who believe in our business and provide financial stability, while we optimize our operational footprint, accelerate improvement in our performance, and deliver on our promise to be the leader in extreme value,” said Bruce Thorn, president and CEO of Big Lots. “As we move through this process, we remain committed to offering extreme bargains, enabling easy shopping in our stores and online, and providing an outstanding customer experience.”
News of the bankruptcy filing and sale comes just days after the struggling discount retailer delayed releasing its second quarter results. Rumors of a possible bankruptcy filing have been swirling as Big Lots announced hundreds of store closures along with the shutting of a distribution center in Columbus, Ohio.
"We are excited to have the opportunity to partner with Big Lots and help return this iconic brand to its status as America's leading extreme value retailer,” said Evan Glucoft, managing director of Nexus. “The Big Lots business has incredible potential and we are confident that its greatest days are ahead."
Under the terms of the Sale Agreement, Nexus will serve as the "stalking horse bidder" in a court-supervised auction. Accordingly, the proposed transaction is subject to higher or otherwise better offers, court approval, and other conditions. Under the sale agreement, if Nexus is deemed the winning bidder, the parties anticipate closing the transaction during the fourth quarter of 2024.
In connection with the court-supervised process, Big Lots has secured commitments for $707.5 million of financing, including $35 million in new financing from certain of its current lenders, in the form of a post-petition credit facility (collectively, the "DIP Financing Facility"). Upon Court approval, the DIP Financing Facility, coupled with cash generated from the company's ongoing operations, are expected to provide sufficient liquidity to support the company while it works to complete the sale transaction.
Big Lots has also filed several customary motions seeking court approval to continue supporting its operations, including continued payment of employee wages and benefits, and payments to certain critical vendors in the ordinary course of business. The company anticipates receiving court approval for these requests and expects to pay vendors in full under normal terms for any goods and services provided after the filing.
