Sports Authority won't come out of bankruptcy as an independent company and instead wants to sell off all its holdings.
"It has become apparent that the debtors will not reorganize under a plan but instead will pursue a sale," company attorney Robert Klyman told Judge Mary Walrath at a hearing Tuesday in the U.S. Bankruptcy Court in Wilmington, Del.
But Walrath, concerned that money from liquidation sales was going to pay off certain creditors and not others, threatened to push the case into a Chapter 7, under which a trustee would oversee the liquidation.
She postponed that decision until a May 3 hearing to give creditors more time to decide who they want to direct the liquidation: company management or an outside trustee, according to Reorg Research, a firm that tracks bankruptcy cases.