Monday, October 20, 2008
Presented by
Linens 'N Things seeks protection in Canada
Thom Weidlich, Bloomberg News Published: Monday, October 20, 2008
The Canadian operating unit of Linens 'n Things Inc., the bankrupt housewares retailer, filed for protection under Canada's bankruptcy law.
Linens 'n Things Canada expects to appear in court in the next week to seek approval to liquidate the business, the company said Monday in a statement distributed by Business Wire.
"This is a difficult day, especially since our Canadian stores were among the best performing stores," the company's chief restructuring officer Michael Gries said.
Earlier this month, the company won permission in U.S. bankruptcy court to shut its 411 stores and sell the remaining merchandise.
U.S. Bankruptcy Court Judge Christopher Sontchi in Wilmington, Delaware, approved Linens' request to hire six companies that specialize in retail liquidations. In return for the right to conduct the sales, the joint venture has promised Linens will collect US$510-million from the liquidations.
Approval by the Canadian court would allow the company to also close its 40 stores in that country, the company said in the statement.
Linens 'n Things, based in Clifton, New Jersey, has been shutting stores, firing employees and liquidating merchandise since it filed for court protection on May 2. Linens failed to attract a last-minute buyer for the entire chain and decided to close its remaining stores in the U.S. and Canada beginning this month.
Before filing for bankruptcy, Linens had 589 stores and more than 15,000 employees in the U.S. Since then, the company has shut more than 200 stores and laid off thousands of workers. The company has 371 stores left in the U.S.
The U.S. bankruptcy case is In re Linens Holdings Co., 08-10832, U.S. Bankruptcy Court, District of Delaware (Wilmington).