Big Lots received interim court approval for certain “first day’ motions related to the company’s voluntary chapter 11 proceedings.
Among other relief — including $550 million in debtor-in-possession (DIP) financing structured as a senior secured superpriority asset-based revolving credit facility, with PNC Bank acting as lead left arranger and administrative agent, according to a related 8-K filing — the court granted interim approval for the company to immediately access a portion of its $707.5 million post-petition financing facilities. This financing, coupled with cash generated from the company’s ongoing operations, is expected to provide sufficient liquidity to support the company while it continues its operations in the ordinary course of business and works to complete the previously-announced sale transaction with an affiliate of Nexus Capital Management.
Additionally, the interim relief granted by the court will enable the company to continue paying employee wages and benefits, and making payments to certain critical vendors, in the ordinary course of business. The company expects to pay vendors in full under normal terms for any goods delivered and services provided after the filing.
A “second day” hearing for the court to consider the company’s requested relief on a final basis is currently scheduled to occur on Oct. 9, 2024 at 1:00 p.m. ET.
“We are focused on delivering on our promise to be the leader in extreme value by helping customers ‘live BIG and save LOTS.’ With the Ccourt relief we have received today and the support of our lenders, we look forward to moving through this process and emerging as a stronger, more-efficient company, well-positioned to serve our customers,” Bruce Thorn, president and CEO of Big Lots, said. “We thank our associates, customers, vendors and all of our stakeholders for their continued support as we work to achieve Big Lots’ full potential.”
As announced on Sept. 9, 2024, Big Lots entered into a sale agreement with Nexus, which agreed to acquire substantially all of the company’s assets and ongoing business operations. To facilitate the transaction, the company, together with each of its subsidiaries, initiated voluntary chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
Under the terms of the sale agreement, Nexus will serve as the “stalking horse bidder” in a court-supervised auction process pursuant to section 363 of the U.S. Bankruptcy Code. Accordingly, the proposed transaction is subject to higher or otherwise better offers, court approval and other conditions. Under the sale agreement, if Nexus is deemed the winning bidder, the parties anticipate closing the transaction during Q4/24.
Additional information regarding the company’s restructuring and sale process is available at a dedicated website, bigstepforbiglots.com.
Davis Polk & Wardwell is serving as legal counsel, Guggenheim Securities is serving as financial advisor, AlixPartners is serving as restructuring advisor and A&G Real Estate Partners is serving as real estate advisor to the company. Kirkland & Ellis is serving as legal counsel to Nexus.
