Gymboree filed with the U.S. Bankruptcy Court a motion for entry of interim and final orders (i) authorizing the Debtors to assume a consulting agreement by and between Gymboree (“merchant”) and Tiger Capital Group and Great American Group (collectively, “consultant”) and (ii) approving procedures for store closing sales.
The motion explains, “The Debtors’ management team and advisors ultimately determined that it may be appropriate to close and wind down (the ‘Store Closings’) up to 450 underperforming brick-and mortar store locations (the ‘Closing Stores’), contingent upon lease negotiations with the Debtors’ landlords. Specifically, the determination of whether or not to close up to 450 stores will depend on whether the Debtors are able to negotiate more favorable lease terms and rent reductions for certain stores with their landlords (the ‘Lease Negotiations’). The Debtors have retained A&G to assist with the ongoing Lease Negotiations.”
In addition, “The Debtors plan to keep approximately 70 to 85 of the Closing Stores open through January 2018. The Debtors estimate that the proceeds from the Sales will be approximately $65 to $85 million….Further, the Store Closings are a critical component of the Debtors’ go-forward business plan, and assumption of the Consulting Agreement will allow the Debtors to conduct the Store Closings in an efficient, controlled manner that will maximize value for the Debtors’ estates.” The Court subsequently granted interim approval to the motion and scheduled a July 11, 2017 final hearing.
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