Gordmans committee wants company to consider going-concern sale option

By Caroline Salls

Pittsburgh, March 20 – Gordmans Stores, Inc.’s official committee of unsecured creditors objected to the bid procedures for the company’s proposed sale of some of its assets, arguing that Gordmans is “not taking full advantage of the opportunity for a going-concern sale,” according to a Sunday filing with the U.S. Bankruptcy Court for the District of Nebraska.

“It appears to the committee that the debtors are following a path that may eliminate any going-concern offers and virtually guarantee a liquidation of all the debtors’ assets,” the objection said.

“A liquidation will ultimately lead to the loss of over 5,000 jobs, many of them in Omaha, the likely rejection of 102 unexpired executory leases and result in tens of millions of dollars in additional claims against the bankruptcy estates.”

The committee said Gordmans should modify the proposed bid procedures to allow for two alternative paths, including a slightly extended timeline if an alternative successful bid is a going-concern bid and an expedited timeline if the successful bid is a liquidation bid, as currently proposed by the company.

The creditor group said the alternative timeline would encourage a range of bidders, give all parties time to understand and participate in the sale process, allow for greater transparency, maximize the ultimate recovery for unsecured creditors and potentially preserve the jobs of Gordmans’ employees.

“The committee believes that it is incumbent on the debtors to aggressively explore all avenues to maximize the recovery for the debtors’ unsecured creditors, not just those parties who hold valid and properly perfected secured claims and who, under any scenario, will likely be paid in full in these Chapter 11 cases,” the objection said.

Omaha-based Gordmans is an everyday value-priced department store. The company filed bankruptcy on March 13 under Chapter 11 case number 17-80304.

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