Bankrupt Home Depot rival reaches sale agreement to remain open

Home improvement retail chains benefitted from increased business at some point of the Covid19-19 pandemic, but many faced a financial downturn when the pandemic faded away.

Consumers stuck at home while stay-at-home orders were in place kept busy with home improvement projects and renovations. This became excellent news for home improvement retailers and provided economic relief for retail establishments struggling before the pandemic.

Related: Iconic auto parts retailer files for Chapter Eleven economic ruin

Once businesses began opening up after the pandemic and people began returning to brick-and-mortar establishments and their places of employment, people had less free time for those home improvement projects.

A decrease in demand for home improvement products, along with inflation and high rates of interest, created financial hardship for some home improvement retail establishments, forcing them to file economic ruin to reorganize their businesses or liquidate and shut stores.

Home improvement chain liquidations and closings are no longer a conventional occurrence, but there have been some in most modern years.

Historic paint retailer Kelly-Moore Paints shut down all 157 of its retail locations and furloughed about 700 employees in January 2024 in an out-of-court wind-down of all its business operations. The corporate may perchance no longer withstand the financial burden of future asbestos claims after paying off about $600 million in claims.

Related: Popular cut price retail chain files for Chapter Eleven economic ruin

Any other major home improvement retailer, LL Flooring, filed for Chapter Eleven economic ruin protection on Aug. Eleven all at some point of the U.S. Economic ruin Court for the District of Delaware in Wilmington, in search of a sale of its assets after littered with broad headwinds all at some point of the housing, repair, and transforming markets that came about when the Covid19-19 pandemic subsided.

The corporate hoped to sell all of its assets in a Section 363 economic ruin sale but opted to close and liquidate over four hundred store locations in 47 states after two stalking-horse bid proposals fell through when the debtor rejected bids from F9 Investments and Issac Capital Group as being inadequate.

More economic ruin stories:

• Big A full lot retail chain ready to file Chapter Eleven economic ruin
• Popular retail product maker files for Chapter Eleven economic ruin
• Mattress Firm rival files for Chapter Eleven economic ruin

Negotiations continued and within days, the debtor sealed an agreement with one of many very important bidders.

Bankrupt home improvement retail chain LL Flooring has reversed course from liquidating and closing all of its stores and agreed to a sale of its assets and distribution center to a subsidiary of non-public equity firm F9 Investments for a purchase order price including a $1 million fixed amount, a catalogue price of fifty seven% of landed cost value of acquired inventory and assumed cure costs.

F9's subsidiary F9 Brands on Sept. 5 reached an agreement with the debtors, the official committee of unsecured creditors, and the debtor-in-possession asset-based loan lenders on an asset purchase agreement and filed the agreement all at some point of the District of Delaware on Sept. 6.

The debtor agreed with the buyer's terms after F9 increased its bid for inventory; set an acceptable value for furniture, fixtures, and equipment; and assumed certain liabilities, cure costs, store leases, and employee obligations.

Below terms of the purchase, the buyer is supporting the employment of up to 1,000 workers, offered to amass up to 219 stores and LL Flooring's Sandston, Va., distribution center and may continue to operate as a going concern, in step with F9 statement on Sept. 10.

LL Flooring will still close about 211 stores, which have already begun liquidating.

The parties have scheduled a sale hearing for Sept. 16 with Judge Brendan L. Shannon to just accept as true with approval of the transaction, that would nearby the end of September.

Related: Veteran fund manager sees world of pain coming for stocks