Bon-Ton Stores

Representation of the creditors’ committee in the chapter 11 bankruptcy of Bon-Ton Department Stores and its affiliates in the District of Delaware. The chain of 200 regional department stores filed for bankruptcy protection in part due to an unprofitable holiday season and a competitive retail market. The company sought to sell itself as a going concern, but the sale process was not successful. After a lack of interest from buyers in the market, the committee helped form a consortium to buy the company, similar to what the firm did in the Aeropostale bankruptcy case that saved over 500 stores and more than 10,000 jobs. Unfortunately, performance at the Bon-Ton stores continued to worsen, eliminating all buyer interest, including from the consortium. The company decided it had no alternatives but to liquidate. The firm, working to protect the unsecured creditors, negotiated the release of over $400 million of potential preference payments made to unsecured creditors so that the hundreds of trade vendors and landlords would not be at risk of any clawback litigation. This case offers another example of how the firm, even in dire situations, can generate value and protection for unsecured creditors.