Privately-held Hastings Entertainment and four affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-11452 (Draw Another Circle).
The Company, which is a value retailer of new and used movies, is represented by Christopher M. Samis of Whiteford Taylor & Preston. The Company announced that is now initiating a detailed process to evaluate offers for the assets of Hastings Entertainment and SP Images in order to maximize stakeholder value.
This development follows the Company’s launch of a successful refresh program across 20 Hastings Entertainment superstores and implementation of a series of initiatives aimed at increasing operational efficiency and overall profitability.
Jim Litwak, president and C.O.O. of Hastings Entertainment, notes, “In the past six months, Hastings has made significant progress in transforming our stores into entertainment destinations with exciting new categories that appeal to every member of the family and also extend to our e-commerce business. We are hopeful that we are on the right path but need an additional cash infusion to complete our remerchandising strategy. An asset sale to a well-capitalized purchaser would give us this financial stability and allow the buyer to pick and choose the assets it wants to acquire, while also disassociating us from the unique challenges facing our sister companies and creating new opportunities to generate long-term value for our creditors, associates, customers, suppliers and ultimately the communities we serve.”
Draw Another Circle and its subsidiaries filed for Chapter 11 protection to facilitate the sales process. SPImages will continue a parallel sale process through bankruptcy, while MovieStop will continue its inventory clearance sales, which are expected to be completed in July 2016. Bank of America has committed to providing $90 million in new debtor-in-possession financing, which, combined with cash from ongoing operations, will ensure the businesses are able to meet their financial commitments throughout this process.
Hastings Entertainment’s Chapter 11 petition indicates total assets of $100 to 500 million. Read more bankruptcy news.
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