Mountain Sports LLC, the parent company of outdoor retail chains Eastern Mountain Sports and Bob's Stores, has filed a liquidation plan in Delaware bankruptcy court that would provide general unsecured creditors with recoveries of less than 3% of their claims.
The company, which operated approximately 50 retail locations in the northeastern United States before filing Chapter 11 bankruptcy in June 2024, proposed the liquidation plan on October 27, 2025, following the sale of substantially all its assets to UK-based Mountain Warehouse Limited and Mountain Warehouse Outdoor Inc. The plan must be approved by creditors and the court before taking effect.
Business Operations and Financial Distress
Mountain Sports LLC and its affiliates operated retail stores under the Eastern Mountain Sports and Bob's Stores brands, targeting outdoor enthusiasts and moderate-income customers with sporting goods, activewear, and equipment. As of the June 18, 2024 bankruptcy filing, the company had approximately $37.27 million in gross inventory and employed around 800 full- and part-time workers.
The company's financial troubles stemmed from its relationship with primary lender PNC Bank, which was owed approximately $29.4 million through a revolving credit facility and term loan. PNC declared a default in March 2024 and stopped funding operations in June, ultimately forcing the bankruptcy filing.
"On March 29, 2024, PNC declared a default under the Loan Agreement," the court filing states. "Subsequently, PNC exercised dominion over the Debtors' cash and receivables" and disagreed with management on restructuring approaches.
Asset Sale and Liquidation Process
Following extensive negotiations and a court-supervised sale process, the company sold substantially all its assets to Mountain Warehouse entities on August 30, 2024. The remaining stores were closed by September 30, 2024, after completing inventory liquidation sales.
The proposed plan establishes a liquidating trust that would be responsible for distributing remaining cash to creditors, pursuing any retained legal claims, and winding down the company's affairs. The plan proposes "deemed substantive consolidation" of the various debtor entities for voting and distribution purposes, simplifying the administration process.
Creditor Recoveries and Voting
Under the proposed plan, general unsecured creditors holding an estimated $35 million to $40 million in claims would receive just 0.8% to 2.2% recoveries. Insider claims, estimated at up to $23 million, would receive between 0% and 1.4%. Priority non-tax claims would be paid in full, while intercompany claims and equity interests would receive nothing.
Approximately 1,131 proofs of claim were filed by the December 20, 2024 deadline. The plan notes that "PNC's Claim, the only Secured Claim asserted against the Estates in these Chapter 11 Cases, has been paid in full and is fully satisfied."
The official committee of unsecured creditors, comprising five vendor companies including VF Corp., Marmot Mountain LLC, and others, has endorsed the plan and "strongly urges the Holders of General Unsecured Claims to vote in favor of the Plan."
Complex Ownership Structure
The case involves a complex corporate structure, with the debtors ultimately owned by GoDigital Media Group through several intermediate holding companies. During the sale process, disputes arose over intellectual property ownership between the debtors and their parent companies, requiring court intervention and a stipulated resolution.
Proposed Timeline and Next Steps
As proposed, creditors entitled to vote would submit ballots by December 1, 2025, at 4:00 p.m. Eastern Time. The bankruptcy court would scheduled a confirmation hearing for December 10, 2025, at 10:30 a.m. to consider approval of the plan.
If confirmed, the plan would become effective shortly thereafter, with the liquidating trustee taking control of remaining assets and beginning distributions to creditors according to the established priorities.
The case, numbered 24-11385 (MFW), is pending before Judge Mary F. Walrath in the U.S. Bankruptcy Court for the District of Delaware. Goldstein & McClintock LLLP, with Maria Aprile Sawczuk as lead counsel, represents the debtors, while the creditors' committee is represented by Lowenstein Sandler LLP and Morris James LLP.
The liquidation of these outdoor retail brands reflects broader challenges facing brick-and-mortar retailers, particularly specialty sporting goods stores competing with online retailers and larger chains.
This article was prepared using Stretto Conductor, our new AI-powered assistant that's here to help. Stretto Conductor was able to create this summary of a 79 page court filing in less than a minute. Always review the underlying docket filings for accurate information. The information and responses generated by Stretto Conductor may contain errors or inaccuracies and should not be relied upon as a substitute for professional or legal advice.