The U.S. Trustee in the Gander Mountain bankruptcy case is objecting to Hilco, LLC being retained as the liquidator for its initial closing of 32 stores because the same parent as Hilco, LLC may submit a stalking horse bid for the retailer’s remaining assets.
In its initial filing on March 10, Gander Mountain said it was seeking permission to close 32 of its 160 stores.
In its objection, The U.S. Trustee said, “If Hilco is negotiating leases that will be subject to the stalking horses purchase, there is a potential conflict because a favorable lease deal to the purchaser would result in a larger deficiency claim against the debtor. In addition, while the companies may be separated by an ethical wall, both companies are subject to the same parent that would presumably want to maximize its interests.”
In an affidavit filed with the court at the time of the bankruptcy, Gander Mountain said it was in discussions with strategic and financial investors since late January and expected to name a stalking horse bidder to support an upcoming bankruptcy auction “in the coming days.”
