The future of the Twin Cities Sports Authority stores is now up in the air after the company announced plans to abandon an effort to reorganize under Chapter 11 bankruptcy and sell off its assets instead.
"It has become apparent that the debtors will not reorganize under a plan but instead will pursue a sale," company lawyer Robert Klyman told the bankruptcy judge at a hearing in Delaware.
It suddenly puts the future of eight Twin Cities stores – including the recently opened downtown Minneapolis location on Nicollet Mall – in jeopardy. The company had not been planning to close any of the Twin Cities locations as part of the reorganization plan.
According to The Wall Street Journal, a May 16 auction has been set for the bulk of Sports Authority's operations. The company has been saddled with more than $1.1 billion in debt. It originally filed for bankruptcy protection in March.
Fortune notes that the company's financial adviser, FTI Consulting Inc., told the judge last week that existing takeover offers were barely enough to cover the $100 million in administrative and liquidation costs.
Klyman added that "major" potential bidders are looking at the company's assets, including its best stores. But there are no guarantees any of the stores will stay in operation.
The Denver Business Journal reports Dick's Sporting Goods, Academy Sports + Outdoors and Modell's Sporting Goods are among potential bidders.
However, the Twin Cities Business Journal notes that at least Dick's is unlikely to be a contender for most of the Twin Cities stores.