(Bloomberg) -- A group of term loan lenders, along with GA Group, a liquidation firm backed by Oaktree Capital Management, won an auction to acquire assets of bankrupt fabric and crafts retailer Joann Inc. and plan to shutter all of its stores.
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GA Joann Retail Partnership LLC, a subsidiary of GA Group, along with the agent on the company’s pre-petition term loan, emerged as the winning bidders of substantially all of Joann’s assets, according to a court filing Saturday.
The groups now “plan to begin winding down the company’s operations and conduct going-out-of-business sales at all store locations,” according to a company statement posted on Joann’s restructuring website. GA Group’s purchase of Joann and its assets still requires approval from bankruptcy Judge Craig T. Goldblatt. A hearing on the sale will be held on Wednesday.
The chosen bid was enough to pay in full both the pre-petition asset-based loan and first-in-last-out facilities, which totaled about $462.3 million at the time Joann filed for bankruptcy, along with a $105 million credit bid, according to the court filing.
About a week before the auction, a bankruptcy court approved to shut down more than 500 Joann stores as part of an effort to recover value for creditors. The retailer entered into bankruptcy with about 800 locations.
Joann had received an offer from liquidator Gordon Brothers Retail Partners during the beginning of its reorganization process, which became a stalking horse bid that set a floor for the company’s assets.
Oaktree took a majority stake in GA Group, or Great American Holdings, from B. Riley Financial Inc. last year.
--With assistance from Jonathan Randles.
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