Discount retailer Christmas Tree Shops Inc. has begun shutting down its business after dwindling sales prompted lenders to withdraw funding for its Chapter 11 case.
(Bloomberg) — Discount retailer Christmas Tree Shops Inc. has begun shutting down its business after dwindling sales prompted lenders to withdraw funding for its Chapter 11 case.
Christmas Tree Shops is negotiating a budget with lenders to continue funding payroll and other operating expenses as it conducts going-out-of-business sales, the company’s lawyer Harold Murphy said during a court hearing Friday. A lawyer representing the retailer’s unsecured creditors said they’re preparing for a liquidation.
The store closings come little more than two months after Christmas Tree Shops filed bankruptcy with hopes of finding an investor that could fund a restructuring or going-concern sale. Christmas Tree Shops had an offer to sell the business but that the deal wasn’t supported by lenders, Murphy said.
Read More: Discount Retailer Christmas Tree Shops Files for Bankruptcy
Murphy said the first few weeks of the company’s bankruptcy were promising but that the trajectory of the Chapter 11 changed because its sales “dropped precipitously” in June and it defaulted on a $45 million bankruptcy loan. The retailer filed a notice in late June that lenders had terminated its Chapter 11 financing.
Christmas Tree Shops filed bankruptcy less than three years after being sold by Bed Bath & Beyond Inc., which itself closed its stores after the big-box retailer filed Chapter 11 in April.
The bankruptcy is Christmas Tree Shops LLC, 23-10576, US Bankruptcy Court for the District of Delaware.
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