(Bloomberg) -- Bankrupt retailer Forever 21 Inc. asked a bankruptcy court to approve plans to sell “substantially all” of its assets to a buyer who might keep the chain in business.
Forever 21 is in “substantial, round-the-clock negotiations” with a potential stalking-horse bidder, which would set a minimum price for the fashion chain while it continues to seek bids for alternative transactions, according to a Thursday court filing.
Plans envision an auction process, with a sale hearing requested for Feb. 4 and approval of the winner on Feb. 11, the company’s lawyers wrote. The ultimate goal is a transaction that preserves Forever 21 as a going concern, they wrote.
The filing includes a proposed stalking-horse agreement but doesn’t name a potential bidder. Bloomberg previously reported that Authentic Brands Group LLC and Simon Property Group were mulling a plan to acquire the retail chain, but that there was no guarantee the various sides would agree on terms.
Forever 21 was talking about selling a stake to Simon and its other largest landlord, Brookfield Property Partners LP, before it filed for bankruptcy in September, Bloomberg previously reported. Negotiations broke down and the company had to seek court protection without a reorganization plan in place.
The chain has since struggled to raise money to exit bankruptcy, with potential lenders and buyers balking because of poor sales and the founding Chang family’s insistence on maintaining control. Forever 21 told suppliers in recent weeks it’s short on cash and that it could be forced to liquidate if a buyer doesn’t emerge.
The case is Forever 21 Inc., 19-12122, District of Delaware (Delaware).
--With assistance from Katherine Doherty, Lauren Coleman-Lochner and Jeremy Hill.
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