Tuesday Morning seeks approval of contingent store inventory sale

By Caroline Salls

Pittsburgh, June 4 – Tuesday Morning Corp. requested court approval of contingent sale procedures required to comply with debtor-in-possession credit agreement milestones, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas.

The company said the DIP agreement requires it to file a motion for approval of the procedures for the sale of all or substantially all of the inventory in its stores if and only if contingencies occur.

The contingencies include the Tuesday Morning debtors’ total liquidity dropping below $20 million at any time, the company’s failure to satisfy a plan/asset purchase agreement milestone date or the company’s failure to obtain a commitment for a qualifying facility.

“Upon the unlikely event that one or more of the contingencies...occur, the debtors and the consultant have agreed, subject to approval by this court, that the consultant will assist the debtors with the sale of all or substantially all of their assets,” the motion said.

If a full-chain store sale does occur, Tuesday Morning said the liquidation consultants base fee will increase to 1.75% of proceeds from 1.5%.

A hearing is scheduled for July 8.

Tuesday Morning is a discount, off-price retailer based in Dallas. The company filed bankruptcy on May 27 under Chapter 11 case number 20-31476.

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