Blair Parent Company Files For Chapter 11 Bankruptcy
WARREN, Pa. — Blair LLC, its parent company, and numerous other subsidiaries, have filed for chapter 11 bankruptcy.
The first-day hearing regarding the bankruptcy filing by Bluestem Brands, Blair, three other Bluestem entities, three Orchard Brands entities, and 10 other affiliated companies is scheduled for Tuesday in U.S. Bankruptcy Court in Delaware, according to court documents.
Bluestem Brands is a wholly owned subsidiary of Bluestem Group, Inc.
Bluestem Group Inc. does not appear on the bankruptcy filing.
According to uscourts.gov, chapter 11 bankruptcy “generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time.”
According to Bluestem, there are no immediate changes expected to operations in Warren and Irvine in the wake of the filing.
“Bluestem will continue conducting business in the ordinary course,” Bluestem Account Supervisor Leah Kondes said. “No immediate changes are anticipated, but to the extent things change we will communicate as appropriate.”
Documents indicate that the companies are moving into a court-supervised sale.
According to court documents, an entity — BLST Acquisition Company LLC — has entered into an agreement with the debtors to set a base for bidding when the companies’ assets are sent to auction. That kind of agreement is known as a ‘stalking horse’ bid. The document says BLST was created for that purpose
The debtors — the 18 companies in the filing — have negotiated to become debtors in possession. They are working together in that capacity and will fund ongoing operations during the bankruptcy process, according to a separate court filing.
The debtors in possession are committed to providing up to $125 million to “fund the ongoing operations during these chapter 11 cases and thereby preserve the value of the debtor’s assets.” That will “provide a clear, strong message… that operations are appropriately funded and the bankruptcy filing will not materially impact the debtors’ operations…” and show “that the debtors are able to continue meeting the needs of their customers, compensating their employees, paying their vendors, and otherwise managing their businesses as close to the ordinary course as possibly.”