Linens 'n Things selects joint venture to conduct store closing sales at 51 locations

By Caroline Salls

Pittsburgh, Aug. 25 - Linens Holding Co. entered into an agency agreement with a joint venture comprised of Gordon Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC to conduct store closing sales at 51 of the company's underperforming stores and other merchandise located at Linens' distribution centers, according to an 8-K filed with the Securities and Exchange Commission.

The distribution center merchandise will be transferred to the closing stores.

Under the agency agreement, the agent will conduct the store closing sales and dispose of owned furnishings, trade fixtures, and/or improvements to real property located in the closing stores.

As a guaranty of its performance under the agency agreement, the joint venture has guaranteed that Linens will receive 102.6% of the total cost value of the merchandise.

Linens said the store closing sales began on Aug. 15, and on the next business day, the agent paid the company 90% of the estimated guaranteed amount.

The agent is entitled to receive a fee equal to 5% of the total cost value of the merchandise. If the proceeds of the store closing sales exceed the sum of the guaranteed amount, sale expenses and the agent's fee, then all remaining proceeds will be split by the company and the agent.

The agent is required to complete the store closing sales by Nov. 26.

Linens 'n Things, a Clifton, N.J., home furnishings specialty retailer, filed for bankruptcy on May 2 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 08-10832.

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