On March 2, 2016, each of the seven debtors which collectively comprise Sports Authority filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The cases are jointly administered under Case No. 16-10527 before the Honorable Mary F. Walrath. The “first day” hearing occurred on Thursday, March 3, 2016, and the “second day” hearing is scheduled for March 29, 2016 at 1:00 p.m. It was an exceptionally long first day hearing, mainly because of the massive amount of consigned goods at Sports Authority stores; somewhere north of $85 million of inventory is consigned goods. It made for an interesting and lively debate, and I encourage anyone interested in the debate to read Judge Gross’ opinion in Whitehall – 2008 WL 2951974.
I presume everyone who sees this post is familiar with Sports Authority, so rather than go into any detail about the company, I’ll only repeat a portion of what was said at the first day hearing – The company has been suffering because of increased online competition and filed for bankruptcy with the intention of exploring both a restructuring and a sale, depending on what they can garner support for. The Debtors’ claims agent has created a website for those interested in following the case: http://www.kccllc.net/sportsauthority.
A formation meeting is scheduled for March 10, 2016 at 10:00 a.m. at the The Hotel DuPont, 11th & Market Streets, Wilmington, DE 19801. Until the Formation Meeting occurs, a copy of the Notice will be available here. The 341 Meeting is scheduled for March 29, 2016 at 9:00 a.m. This looks to be a case with complex issues that will affect a huge number of stakeholders, including vendors, landlords, contract counterparties and employees. The United States Trustee will monitor this case, but as we saw at the first day hearing, parties’ rights can be affected quickly and suddenly. All creditors involved should make sure they stay informed about the case.