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Sports Authority Gets Added Time To Sell Off Parts Rather Than Liquidate Assets

Attorneys for Sports Authority yesterday told a federal bankruptcy judge that the retailer is "still pursuing a 'robust' sale process and is not yet ready to settle for liquidation," according to Alicia Wallace of the DENVER POST. Judge Mary Walrath "could have forced the retail giant into Chapter 7 liquidation." Last week, she "struck down" $595M in bankruptcy financing that "did not account for rent and administrative fees, but Sports Authority and its lenders ironed out a debtor-in-possession financing agreement that accounted for those requests." Attorney Robert Klyman said that the retailer now can "pursue discussions with several parties that expressed interest in buying all or most of the Englewood-based company's assets." Klyman: "The liquidation word is not in our vocabulary." Wallace notes the court had "set an April 28 deadline for an offer by a 'stalking horse' -- a potential buyer that would make a baseline tender offer in advance of an auction." But Klyman said that "none came forth." Sports Authority's attorneys last week said that the company "would not emerge under a reorganization plan, but rather would pursue sales of its assets auctioned to the highest bidder." In addition to leases and IP, the remainder of Sports Authority's naming-rights deal with the Broncos "also could be up for grabs." The Denver Metropolitan Football Stadium District and the Broncos have "remained on the sidelines through the Chapter 11 process, issuing statements expressing their commitments to their respective partnerships and agreements with Sports Authority." However, district officials said that they would "review the agreement with Sports Authority if the contract was broken" (DENVER POST, 5/4).

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