It appears that Bon-Ton Stores Inc., the parent company of Boston Store that has its corporate offices in Milwaukee and York, Pennsylvania, will go out of business, because the only bidders competing at the Monday start of its court-supervised bankruptcy auction were liquidators, according to sources speaking to Reuters.
That would mean the end for one of Milwaukee’s most iconic retailers and it would put 2,255 Wisconsin employees out of work. Bon-Ton has 700 employees at its corporate offices in downtown Milwaukee. It has stores throughout the state including the Boston Stores at Mayfair Mall in Wauwatosa, Southridge Mall in Greendale, the Shops of Grand Avenue in downtown Milwaukee, Bayshore Town Center in Glendale, Brookfield Square Mall in Brookfield and Regency Mall in Racine.
Another report, from Reorg Research, said that only two qualified bids for substantially all of Bon-Ton’s assets, both of which are liquidation bids, are going forward in the auction: the joint credit bid submitted by an ad hoc group of second lien noteholders and Great American (an affiliate of second lien noteholder B. Riley Financial), and a bid submitted by the Hilco Merchant Resources and Gordon Brothers Retail Partners joint venture.
On Friday, Bon-Ton filed notice that it had selected the Hilco/Gordon Brothers bid as the baseline bid for the bankruptcy auction.
Bon-Ton had been working with an investor group that included U.S. mall owners Namdar Realty Group and Washington Prime Group Inc. to secure a bid that would have kept Bon-Ton in business as a going concern.
The group signed a letter of intent to purchase Bon-Ton at the bankruptcy auction, outlining the terms of a deal that would have kept the current management team in place and the business operating. The deal, however, included a number of contingencies and required Bon-Ton to seek court approval for the company to pay a $500,000 work fee as the parties sought to finalize a purchase agreement.
But U.S. Bankruptcy Judge Mary Walrath said last week she would not approve that payment, noting Bon-Ton was not paying the fees of any other bidders and that the offer from the investor group did not amount to a qualified bid.
Bon-Ton has more than 22,000 employees and 254 stores in the U.S.
Earlier this month the company filed a notice with the state of Wisconsin indicating that it would close 12 stores and its corporate office in Milwaukee if it was not sold a going-concern buyer. The notice said the company has 717 employees at its downtown Milwaukee corporate office, 243 at the Brookfield Square store, 201 at the Bayshore Town Center store, 191 at the Mayfair Mall store, 180 at the Southridge Mall store, 108 at the Regency Mall store in Racine and 52 at the Shops of Grand Avenue store in downtown Milwaukee. Layoffs are anticipated to begin on June 5, according to the notice.
Earlier this year the company announced plans to close 42 stores, including nine in Wisconsin.
The bankruptcy auction for Bon-Ton’s assets, which is being held at a law office in New York, will resume this morning at 8 a.m., according to the Reorg Research report.
