The Children’s Place voluntarily filed petitions for chapter 11 relief on Nov. 8 in the U.S. Bankruptcy Court for the District of New Jersey to pursue a sale transaction. The company said all of its stores and e-commerce sites remain open and continue to serve customers.
The company seeks to sell substantially all of its assets under §363 of the U.S. Bankruptcy Code through a competitive marketing and sale process designed to secure the highest or otherwise best bid, with the goal of continuing the business. It is requesting that parties submit bids by Dec. 9 and expects to complete the process by the end of December.
The company also expects to secure an agreement for debtor-in-possession (DIP) financing. Subject to court approval, the DIP financing will allow the company to continue operations through its sale process and chapter 11 cases. The company has been working closely with its lenders to secure financing that is intended to support the business throughout the process.
The company also has filed customary motions to continue paying employee wages and benefits, maintain certain customer programs and pay vendors for goods and services provided after the filing date. It is seeking recognition of the chapter 11 proceedings in Canada to include its Canadian assets and operations in the sale process.
While the company pursues a buyer through the chapter 11 process, it must prepare for the possibility that a sale to continue the business cannot be achieved. To that end, it entered into an agreement with GA Group to assist it with the sales that are ongoing in its stores. The agreement provides a path forward if the company cannot secure a better alternative through the court-supervised sale process. The company said that is not the path it is striving toward.
The company has been evaluating its operational footprint to invest its resources in its strongest locations moving forward. It has determined that certain store closures will be necessary during the chapter 11 process. The evaluation is ongoing, and the company will communicate confirmed decisions as they are made.
The company’s claims agent, Omni Agent Solutions, will distribute standard court notices and mailings to different parties of interest as important milestones unfold. The company said the communications are a routine part of the process and signal progress in the chapter 11 cases, and it does not expect recipients to need to take action as a result of the notices.
