CLIFTON, N.J.–Bankrupt Linens ’n Things auctioned off the inventory in the 120 stores it’s closing for $124 million to a joint venture between Tiger Capital and SB Capital, the winning bidders.
The retailer received 96.6 percent of the cost of the inventory, said Paul Traub, a principal at Asset Disposition Advisors, which managed the auction process.
“A lot of times when you see companies in trouble if you have to liquidate inventory at substantially below the cost of inventory, it’s a bad sign,” Traub told HFN. “We got very close to the cost of inventory, which is a good sign.
“It shows that the company is not really in a horribly distressed position because it got good value for their inventory. Hopefully this will encourage the company’s bank [GE Capital] to provide additional credit.”
The $124 million reflects $2.5 million more than Tiger and SB Capital’s original stalking horse bid, Traub said.
The disposition of Linens’ 120 leases is still under way, Traub said.