“On the other hand, if someone was willing to fight, there must be something there worth fighting over.”
Lots of money in big chain retail bankruptcies. Even after inventory markdowns a well run clearance process for a big chain will return hundreds of millions in cash. Lease termination negotiations with landlords are also worth millions with respect to how much other creditors are paid. During a similar big discount store chain bankruptcy in the 1990’s the CFO’s of the big suppliers pooled resources with the banks to hire heavy hitter bankruptcy attorneys to scrutinize every detail. The company I was with recovered $46 million of the $50 million in accounts receivable. Going into the process we expected to recover 25 cents on the dollar. As for those who didn’t join the effort, ten cents on the dollar.
Many of these big bankruptcies involve negotiations with the federal government about the disposition of millions of dollars of pension money. Here again, the tough and determined negotiators for creditors can often prevail. Taxpayers would be shocked at how many time the federal government weakly assumes responsibility for pension obligations while the creditors sweep up the cash. When millions of dollars are at stake, those who fight most aggressively typically get the largest shares of the pie.
Toys R Us was unusual in that they owned their major distribution center rather than leasing it. So there is a 1M+ square foot building in northern New Jersey that may end up being the company’s biggest asset as it is dissolved.