Bankrupt department-store chain Bon-Ton Stores Inc. appears to be heading for liquidation after receiving two bids, both from liquidators, in a court-supervised bankruptcy auction on Monday, as the Central Penn Business Journal explained Tuesday morning.
As the Business Journal pointed out, Reuters has reported that only liquidators have bid and that Bon-Ton will go out of business. The auction ran late Monday and is still underway, according to New York research firm Reorg Research. The firm, citing sources familiar with the matter, said the auction was to resume Tuesday at 9 a.m.
One of the two bids is a joint effort from Hilco Merchant Resources and Gordon Brothers Retail Partners, which is the same group running a store liquidation for Toys R Us.
The other is a joint bid from an ad hoc group of second lien noteholders and Great American Group, which is an affiliate of lienholder B. Riley Financial. Great American also is part of the Toys R Us liquidation.
A Bon-Ton spokesperson was not immediately available for comment on the auction. The chain, which has dual headquarters in York County and Milwaukee, filed for bankruptcy in February. It has been looking for a buyer, but also making contingency lay-off plans in case it is forced to shut down.
The liquidation bids come after a group of investors last week tried to buy the company and keep it operating. But a bankruptcy court judge denied the investor group’s request for an upfront payment from Bon-Ton of $500,000 to cover due diligence work on the proposed rescue plan, which led to the auction on Monday.
A U.S. Bankruptcy Court judge must still approve any liquidation deal. Bon-Ton operates 250 stores in 23 states under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers banners.
There are two stores in Luzerne County, one in the Wyoming Valley Mall in Wilkes-Barre Township and one in the Midway Shopping Center in Wyoming.
Bon-Ton also employs about 21,000 people. The company traces its roots to 1854.