Sports Authority won't come out of bankruptcy as an independent company and instead wants to sell off all its holdings.
"It has become apparent that the debtors will not reorganize under a plan but instead will pursue a sale," company attorney Robert Klyman told Judge Mary Walrath at a hearing Tuesday in U.S. Bankruptcy Court in Wilmington, Del.
But Walrath, concerned that money from liquidation sales was going to pay off certain creditors and not others, threatened to push the case into Chapter 7, under which a trustee would oversee the liquidation.
She postponed that decision until a May 3 hearing to give creditors more time to decide whom they want to direct the liquidation: company management or an outside trustee, according to Reorg Research, a firm that tracks bankruptcy cases.
Either way, a liquidation makes it much more likely that Sports Authority Field at Mile High will carry a different name when the Denver Broncos take the field next season.
Englewood-based Sports Authority, when it filed for bankruptcy protection in March to rework $1.1 billion of debt, laid out two paths. One was to pare down non-performing stores and emerge from bankruptcy with its independence intact. The other was to sell everything and cease operations.
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