A federal bankruptcy court judge has approved an agreement that would allow holders of Ski Market gift cards to redeem them for half of their remaining value this week.
Ski Market, the Wellesley-MA ski and bike chain that filed for bankruptcy protection last month, agreed to allow customers to redeem Ski Market gift cards for 50 percent of the value of those cards through the end of the day on Sunday, Jan. 24.
Ski Market potentially owes consumers as much as $293,000 for unredeemed gift cards and gift certificates, according to court documents.
That prompted Connecticut Attorney General Richard Blumenthal to file an objection to the proposed sale of Ski Market in bankruptcy court. The attorneys general in Rhode Island and Massachusetts indicated they were also considering filing objections over the gift cards.
When a retailer files for bankruptcy, gift card holders are considered unsecured creditors and need to wait in line to collect whats owed to them behind secured creditors. However, many retailers seek bankruptcy court approval for the right to fully honor any gift cards to protect the retailers public appearance and goodwill during bankruptcy.
Ski Market, which is scheduled to be sold at a bankruptcy auction next month, agreed last week to a 50 percent reimbursement for gift cards. South Shore Savings Bank, a Weymouth-based bank and Ski Markets largest creditor, and a committee of other creditors also endorsed the reimbursements.
As a result of the concession, Blumenthal agreed to withdraw his objection to the sale of Ski Market, and the other attorneys general agreed not to object to the sale because of the gift cards issue.
The company has Ski Market stores in Boston, Framingham, Pembroke, Woburn, Avon, Conn., and Warwick, R.I., as well as the St. Moritz store in Wellesley.
