NEW YORK - Specialty retailer Linens 'n Things, which filed for bankruptcy protection in May, said Wednesday that it is scrapping a reorganization plan and will put itself up for sale Tuesday in an auction.
The company expects a "stalking horse" bidder -- which has not yet been named -- at the auction. That bidder has proposed liquidating the company, said Rich Tauberman, a representative for the chain's parent company, Linens Holding Co. However, he added that the company is open to other bids.
A stalking-horse bid is an initial offer on a bankrupt company's assets from an interested buyer chosen by the company.
Linens 'n Things has had "inquiries by a number of parties," some of whom are interested in keeping part or all of the stores, he said.
There's still a weeklong auction process, Tauberman said. "I don't think we can make any conclusions until the auction is complete."
Linens 'n Things, based in Clifton, N.J., filed for Chapter 11 bankruptcy protection in May with the U.S. Bankruptcy Court for the District of Delaware.
In August, the company said it reached a plan of reorganization with the court. However, it decided to auction its assets "over the past few months looking at the economy and realities of the retail marketplace," Tauberman said.
A filing with the court Friday night and a hearing Tuesday set out the details of the upcoming auction process, Tauberman said.
