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Goody's back in bankruptcy, looking to liquidate this time
By Caroline Salls
Pittsburgh, Jan. 14 - Goody's, LLC filed for Chapter 11 bankruptcy Tuesday in the U.S. Bankruptcy Court for the District of Delaware in order to liquidate, just months after the company's predecessor emerged from a previous bankruptcy.
As previously reported, predecessor Goody's Family Clothing, Inc. emerged from bankruptcy on Oct. 20.
However, the company said unexpectedly poor holiday sales and expected credit support that did not come to fruition forced it back into Chapter 11.
In conjunction with the filing, Goody's requested court approval of an agency agreement under which a joint venture comprised of Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC will conduct going-out-of-business sales for the company.
Under the agency agreement, the joint venture has guaranteed that Goody's will receive 77.7% of the cost value of the merchandise sold, provided that the agency agreement is approved by the court by Jan. 15. For every day between Jan. 16 and Jan. 31 that the agreement is not approved, the guaranteed amount will be reduced by 30 basis points.
The liquidation agent is required to complete the sales and vacate the stores by March 31.
Goody's listed $100 million to $500 million in both assets and debt.
The company's largest unsecured creditors include Quebecor World (USA) Inc., Chicago, with a $1.42 million trade claim and Triangle S.C., LLC, Jersey City, N.J., with a $1.17 million trade claim.
Goody's is a Knoxville, Tenn., family apparel retailer operating in small- to mid-size markets primarily in the Southeast. Its Chapter 11 case number is 09-10124.
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