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.
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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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