Christmas Tree Shops, operator of 82 holiday decorations stores in 20 states, has seen its efforts to stay in business through Chapter 11 bankruptcy reorganization get disrupted and is now being pushed to conduct a liquidation sale.
Lenders to the firm following its bankruptcy filing in May said the Middleborough, Massachusetts-based retailer is in default of related loan agreements. The lenders are asking the bankruptcy court to allow the firm to find a potential so-called stalking horse bidder, a buyer that will set a guaranteed minimum value for the shops’ assets, according to bankruptcy court documents.
Christmas Tree Shops’ brick-and-mortar locations specialize in year-round seasonal goods at low pricing, including home decor, bed-and-bath products, kitchen and dining products, furniture, and food.
The chain, which recently rebranded as CTS, received a commitment for up to $45 million in debtor-in-possession financing from Eclipse Business Capital and ReStore Capital as part of its Chapter 11 filing. The lenders notified the court on June 21 that CTS defaulted on its loan obligation, thus prompting the liquidation process to begin, according to court documents.
Representatives of CTS did not immediately respond to requests to comment. The liquidation plans were reported earlier by the Wall Street Journal.
At the end of May, the retailer hired SSG Capital Advisors to provide investment-banking services in connection with the reorganization efforts including identifying potential investors or buyers and entering into a plan funding agreement, according to court documents.
SSG has conducted an extensive marketing process with potential strategic and financial buyers to solicit interest contacting up to 350 potential buyers, according to court documents. Several have expressed interest in pursuing an acquisition.
When it filed for bankruptcy protection in May, Christmas Tree Shops joined its former owner, Bed Bath & Beyond, in seeking bankruptcy protection in a move that added to the growing list of retailers this year that have filed for Chapter 11.
David's Bridal, based in Conshohocken, Pennsylvania, has also sought bankruptcy protection, and Dallas-based Tuesday Morning is liquidating after filing. Corner Bakery, based in Dallas, has filed for Chapter 11, as has Party City, based in Woodcliff Lake, New Jersey.