Next Week in Bankruptcy

Monday in White Plains, N.Y., Great Atlantic & Pacific Tea Co. will seek court permission to auction off 120 of its stores and close another 25.

The grocer, which filed for its second chapter 11 of the decade last month, is facing opposition to the sales and closures from landlords and the Pension Benefit Guaranty Corp., although most of the objections mention talks with A&P counsel and the probability that small changes will alleviate concerns.

During its chapter 11 proceeding, A&P says it will sell and close the initial 145 stores—nearly half of its locations—before trying to quickly sell some others. The stores that don’t get sold will likely be closed.

A&P exited its last chapter 11 in the hands of investors including supermarket mogul Ron Burkle, whose Yucaipa Cos. led a $490 million financing package that the company called its only alternative to full liquidation. A&P had hoped that bankruptcy would better position it to compete. It renegotiated labor costs with unions and adjusted food and supply-chain costs with vendors. It also planned to remodel outdated stores and modernize its technology.

But sales slumped, labor costs continued to weigh, and the company ended up back in chapter 11.

Thursday in Delaware, Colt Defense LLC will seek approval of procedures for an auction.

An opening bid by private equity owner Sciens Capital Management that involved assuming Colt’s senior debt has fallen through, but the company is still seeking the auction without a lead bidder.

Under the proposed auction timeline, Colt will be seeking court approval of a sale by Oct. 8, just weeks before a lease on its plant runs out. An affiliate of Sciens serves as the landlord for the plant. Colt has said potential buyers need to know whether they’ll have a place to make guns.

Colt’s real estate has emerged as a crucial element of the company’s turnaround effort. Lost business and an overload of debt left Colt in financial distress. Eviction could jeopardize Colt’s chances of emerging successfully from bankruptcy, creditors have warned in court papers.

When it looked like Sciens would be able to salvage its investment in Colt through a bankruptcy buyout, the landlord was willing to extend the lease, creditors said. Once Sciens dropped out of the lead bidding slot, the lease extension offer also disappeared, creditors said.

Landlord NPA Hartford LLC said all decisions regarding the Colt lease are in the hands of a disinterested person rather than Sciens executives connected to the landlord and to Colt.

Next Friday in Manhattan, Relativity Media LLC will ask a judge to approve procedures for an auction of the Hollywood studio’s major assets.

The lead bid for Ryan Kavanaugh’s studio has been made by a group of distressed-debt investors—including Anchorage Capital, Luxor Capital and Falcon Investment Advisors—that own some $362 million of Relativity’s debt. The group will take home a $3.75 million breakup fee if their offer is topped at auction. That bid, a proposal to swap $250 million of debt for Relativity’s TV, film and distribution assets, could be challenged by Mr. Kavanaugh himself, people familiar with the matter have told The Wall Street Journal.

In court papers, the Beverly Hills, Calif.-based film studio behind the Bradley Cooper thriller “Limitless” and MTV reality show “Catfish” listed total assets of about $600 million and total liabilities of about $1.2 billion.

Mr. Kavanaugh started Relativity in 2004 and guided its evolution from an arranger of financing for movies released by studios like Sony Pictures Entertainment and Comcast Corp.’s Universal Pictures into a producer and distributor of movies and television. Mr. Kavanaugh has also aggressively expanded beyond film, opening divisions that included a for-profit university, sports representation and a marketing consultancy.

But the company’s more well-known releases, such as “Immortals” and the Nicholas Sparks drama “Safe Haven,” are outnumbered by box-office misfires. The last movie distributed by the studio to gross more than $50 million at the domestic box office was “Free Birds” in November 2013. Recent releases include the flops “3 Days to Kill” and “Black or White.”

-Tom Corrigan and Peg Brickley contributed to this article.

Write to Joseph Checkler at [email protected]. Follow him on Twitter at @JoeCheckler