Payless Requests Independent Review of Pre-Bankruptcy Management

Payless ShoeSource, a discount footwear retailer, is investigating whether its leveraged buyout by private equity firms and the dividend payments they received resulted in its bankruptcy, Reuters reports.

Payless disclosed its investigation in a filing that said it intends to persuade U.S. Bankruptcy Judge Kathy Surratt-States of St. Louis to reject a request by an official committee of creditors to hire an expert to review pre-bankruptcy transactions.

The Topeka, KS-based retailer said in court papers that a separate investigation could prevent its goal to recapitalize and emerge from bankruptcy in August.

"The hiring of a trial expert by a committee seems antithetical to that goal," the court filing said.

Private equity firms Golden Gate and Blum acquired Payless in 2012.

The company filed for bankruptcy in April with $838 million of debt.

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