The 26 City Sports stores, including nine in Massachusetts, will be liquidated by a joint venture that includes a Boston-based advisory firm, according to a filing today in U.S. Bankruptcy Court in Delaware.
The chain that launched 32 years in ago in Massachusetts filed for Chapter 11 bankruptcy protection a month ago. The best offer for a buyer was from companies that dispose of retail assets, a bankruptcy filing states.
"A joint venture consisting of Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC (Hilco/GB) was designated as the successful bidder," it states.
The Massachusetts stores include some prime retail properties, including locations at 1035 Commonwealth Ave. near Boston University; 225 Franklin St. in the Financial District; 480 Boylston St. in the Back Bay; 11 Bromfield St. in Downtown Crossing; 44 Brattle St. near Harvard Square; and 1815 Massachusetts Ave. near Porter Square in Cambridge. The retailer also operates stores in Chestnut Hill, at Legacy Place in Dedham and in Wellesley.
According to the initial filing, creditors holding the largest unsecured claims are: Nike USA Inc. (NYSE: NKE), owed $1.27 million; Under Armour Performance Apparel (NYSE: UA), owed $1.04 million; Asics America Corp., owed $1.03 million; Patagonia Inc., owed $1 million; and The North Face, owed $968,300. Local creditors include New Balance, owed $438,733, and Converse, owed $134,179.
Among other local creditors, the operator of Chestnut Hill Shopping Center in Boston is owed $124,464.
Holders of equity securities include: Highland Consumer Fund I LP, holding 67.17 percent; and Highland Consumer Fund 1-B LP, holding 14.33 percent. Charitable funds associated with former Fidelity fund manager Peter Lynch also hold stakes.
City Sports operates 26 stores in eight states and Washington, D.C., including nine in Massachusetts. The retailer opened its first Virginia store in September.
The agreement to sell the stores to a liquidator includes stipulations to guarantee an orderly process, such as a mandate that all liquidation sales occur during stores' regular business hours.