Next Week in Bankruptcy

On Monday, Pacific Sunwear of California Inc. will look to move a step closer to exiting bankruptcy protection when it asks a judge for approval to send out its reorganization plan to creditors for a vote. The retailer filed its so-called disclosure statement, or plain-language outline of its bankruptcy plan, when it sought chapter 11 protection in April. Unsecured creditors and certain term-loan lenders will be allowed to vote on the plan. Pacific Sunwear has roughly $60 million in unsecured debt, including claims for unpaid rent and leases, court papers show.

The teen retailer will also seek approval from Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del., to use the rest of a $100 million bankruptcy loan. The day after filing for bankruptcy, Pacific Sunwear won approval to use up to $62.5 million of the loan, which is provided by a group of existing lenders led by Wells Fargo NA. The retailer said in court papers it plans to use the loan to pay back an existing loan in full, professional fees related to the case and to keep stores open through the bankruptcy process.

Earlier this month, Pacific Sunwear won approval to move forward with plans to test its restructuring proposal at auction. The retailer has a June 15 deadline to receive bids, and if needed, will hold an auction on June 22.

Also on Monday, sporting-goods retailer Sports Authority Holdings Inc. will hold a court-run auction in Wilmington for its stores despite being unable to nail down a stalking horse, or lead, bidder. The retailer was to receive all offers by May 11. Sports Authority’s attorney previously said he expects there to be “substantial parties” to place bids for all “or at least major portions” of its operations.

Sports Authority filed for bankruptcy on March 2 loaded with some $1.1 billion in debt and the hopes of a turnaround, while looking for buyers. But nearly two months later, and after considerable tensions with creditors and vendors, the company’s attorney said there was no longer a chance of reorganizing the big-box retail chain that would allow it to exit bankruptcy while still in operation.

While prospective buyers interesting in same some or parts of the chain can place bids, liquidators will almost certainly be present at the auction.

On Tuesday, troubled coal miner Peabody Energy Corp. will seek approval to use the rest of its $800 million bankruptcy loan during a hearing in the U.S. Bankruptcy Court in St. Louis. In April, Peabody won approval from Judge Barry S. Schermer to begin drawing $200 million of a $500 million term loan and also access a $100 million letter-of-credit facility, as well as a $200 million facility available to satisfy environmental obligations.

In addition to Peabody’s existing secured lenders, the company’s unsecured bondholders, which includes investors Centerbridge Partners LP, Aurelius Capital Management LP, Elliott Management Corp., and Capital Research and Management, pitched in on the bankruptcy financing.

Peabody filed for bankruptcy protection in April with more than $10 billion in debt as of the end of last year.

-Jacqueline Palank and Peg Brickley contributed to this article.

Write to Lillian Rizzo at [email protected]. Follow her on Twitter at @Lilliannnn