Christmas Tree Shops store-closing sales missed target by $14M

An attorney representing Christmas Tree Shops said the Massachusetts-based retailer’s going-out-of-business sales fell $14 million short of its revenue goal during a federal bankruptcy court hearing on Wednesday.During the same hearing in Wilmington, Delaware, an attorney for bankruptcy lender and store liquidator Hilco Global argued that Christmas Tree Shops management exceeded its loan budget and told employees they would receive bonuses that Hilco never agreed to fund.Judge Thomas Horan convinced the two sides to reach a partial deal on employee wages in which Hilco affiliate ReStore Capital agreed to pay $1.17 million to store-level employees who worked during the company’s store-closing sales.Hilco’s attorney initially argued the lender should not pay more than it budgeted in the bankruptcy loan, saying the company did not trust Christmas Tree Shops’ calculation of employee wages. Horan, however, threatened to withhold fees from bankruptcy lawyers and professionals if any low-level CTS employees did not get paid.Horan ended up converting Christmas Tree Shops’ bankruptcy from a Chapter 11 to Chapter 7 liquidation, and said a court-appointed trustee should be in charge of winding down the business. The trustee will ultimately address the issue of wages for employees who worked at CTS headquarters in Middleborough, as well as the wage claims filed by the 250 workers who were laid off when the company went bankrupt.Christmas Tree Shops filed for Chapter 11 bankruptcy in May with hopes of keeping most of its stores open. But in early July, documents filed with the U.S. Bankruptcy Court for the District of Delaware showed the company planned to close and liquidate all of its stores unless a buyer quickly emerged.The Wall Street Journal reported that the business took out a $45 million bankruptcy loan, but creditors terminated the loan after they defaulted on the terms because liquidity and revenues worsened.During the … Read the rest

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