The sporting goods retailer, Sports Authority, filed for Chapter 11 bankruptcy protection back in March. They are now “scrambling to close the doors on most or all of its stores by the end of the month, according to multiple store employees and managers, an abrupt move that comes amid a fight over cash between lenders and suppliers.” In other words, it appears that they are planning a complete liquidation. Although the stores’ employees and managers knew the company was planning on eventually liquidating, it came as a surprise that they are shutting down so quickly.
Sports Authority has used the “going of business sale” funds generated so far to pay off top-ranking lenders. “The question is, who gets the cash—lenders that say they’re owed another $240 million, landlords that are still trying to collect the March rent, or suppliers that shipped an estimated $50 million worth of goods to Sports Authority in the months before it filed for bankruptcy?” It looks like we won’t know until August, when Sports Authority is due back in court.
You can read the Wall Street Journal’s article here.