Stein Mart Inc. has enough money to pay off secured and priority claims, but it won’t be able to pay most of the $217 million to $421 million in remaining unsecured claims against the company, according to its Chapter 11 reorganization plan filed Jan. 15.
The Jacksonville-based fashion retailer filed for Chapter 11 bankruptcy Aug. 12 in U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division.
It immediately began going-out-of-business sales and closed the last of its 281 stores Oct. 26.
Stein Mart’s disclosure statement with the reorganization plan said the company had about $16.6 million in cash at the end of October.
The company expects to pay $1 million in remaining secured claims and $3 million to $12 million in priority claims, but it expects to have $15 million or less to pay off unsecured claims.
The company’s only remaining substantial assets are its tax returns, which are projected to produce between $4 million and $10 million in refunds, it said.
The disclosure statement said the Official Committee of Unsecured Creditors supports confirmation of the plan.
No date has been scheduled for a confirmation hearing in bankruptcy court.
Stein Mart had about 7,950 employees when it filed its Chapter 11 petition in August and about 20 at the beginning of December, including CEO Hunt Hawkins, the statement said.
The remaining employees are engaged in accounting and human resources functions.
Although Stein Mart intended to close down when it filed for bankruptcy, the company decided a Chapter 11 reorganization process was preferable to a Chapter 7 liquidation, the statement said.
The Chapter 11 process allowed it to retain employees who were familiar with the company’s accounting and human resources functions, rather than bringing in a new team of outsiders.
Although Stein Mart went out of business, a company that specializes in reviving online stores of established plans intends to relaunch the Stein Mart brand online.
Miami-based Retail Ecommerce Ventures acquired Stein Mart's intellectual property for $6.2 million in a bankruptcy court auction.
The company said in December it intends to relaunch Stein Mart as an online-only store early in 2021.