Sports Authority has bought its stores some time.
The failed sports retailer cut a deal this week with senior lenders led by Wilmington Savings Fund Society in a bid to keep its bankruptcy liquidation afloat, Dow Jones reported.
The move could potentially be bad news for landlords and suppliers, who are still waiting for compensation after Sports Authority filed for bankruptcy earlier this year.
The retailer admitted in a court filing Tuesday that banks are claiming all money obtained in its last days, which was predicted earlier in the case by creditors’ lawyers. Court papers said that without a deal, lenders by will would have to cut the cords on funding.
A separate motion revealed that Sports Authority’s lenders agreed to fund a maximum of $2.85 million in bonuses to top company executives. According to the proposal, four executives are receiving up to $1.5 million in bonuses and the retailer declined to comment who would receive these funds at the end of the bankruptcy period.
Lenders claim they’re owed an additional $240 million, although Sports Authority is expected to pay off some debt from liquidation proceeds by Friday. Lenders will also take $71 million, allowing the company to use remaining funds to pay for its liquidation.
Going-out-of-business sales are still being held at many store locations. Sports Authority has also auctioned off its intellectual property for $15 million to Dick’s Sporting Goods and some other leases.