8-K: Former Big Lots Moves to Chapter 7 Liquidation

Former BL Stores, Inc. (formerly Big Lots) has filed a motion to convert its Chapter 11 bankruptcy cases to Chapter 7, signaling a full liquidation and no expected recovery for shareholders.

Summary

• Former BL Stores, Inc. (formerly Big Lots, Inc.) and its subsidiaries (the Debtors) filed a motion on October 24, 2025, to convert their Chapter 11 bankruptcy cases to Chapter 7.
• The Debtors previously filed for Chapter 11 on September 9, 2024.
• An Asset Purchase Agreement with Gordon Brothers Retail Partners, LLC for the sale of assets was approved on January 2, 2025, and closed on January 3, 2025.
• Following the asset sale, the Debtors continued to manage remaining assets as debtors-in-possession, aiming to monetize them and wind down their estates.
• The conversion to Chapter 7 is sought as it is believed to be in the best interests of creditors.
• A hearing on the motion is scheduled for November 4, 2025, with the conversion expected to be effective as early as that date if approved.
• If converted, a Chapter 7 trustee will be appointed to liquidate remaining assets for distribution to creditors, and the Debtors will cease managing their assets.
• The company does not expect to file further SEC reports unless directed by the Chapter 7 trustee.
• The company believes its common shares are worthless, as no proceeds are expected to be distributed to shareholders.

Sentiment

Score: 1

Explanation: The filing announces the company's intent to liquidate under Chapter 7, explicitly stating that common shares are believed to be worthless and no proceeds are expected for shareholders. This represents the worst possible outcome for equity investors.

Negatives

• The company is moving from Chapter 11 reorganization to Chapter 7 liquidation, indicating the failure of reorganization efforts.
• Shareholders are explicitly not expected to receive any proceeds from the liquidation.
• Common shares are believed to be worthless.
• The company expects to cease filing reports with the SEC, reducing transparency.

Risks

• The Bankruptcy Court may not approve the motion to convert the Chapter 11 Cases to Chapter 7 Cases.
• The liquidation process under Chapter 7 may not yield sufficient assets to satisfy all creditors.
• Shareholders face a complete loss of investment as common shares are believed to be worthless.
• Future developments and performance are materially affected by factors relating to the Chapter 11 Cases.

Future Outlook

The company expects to convert its Chapter 11 cases to Chapter 7, leading to the liquidation of remaining assets by an appointed trustee. It does not anticipate filing further SEC reports and believes its common shares are worthless, with no proceeds expected for shareholders.

Management Comments

• "The Debtors now believe that it would be in the best interests of their creditors to convert the Chapter 11 Cases to cases under Chapter 7 of the Bankruptcy Code."
• "The Company also does not expect to be able to distribute any proceeds to the Company’s shareholders in or after the expected liquidation proceedings and, therefore, believes that its common shares are worthless."

Industry Context

This announcement reflects the final stage of a retail company's bankruptcy process, moving from an attempt at reorganization (Chapter 11) to full liquidation (Chapter 7). It highlights the severe challenges faced by some traditional retailers in a competitive and evolving market, ultimately leading to the cessation of operations and a complete loss for equity holders.

Legal Proceedings

• Voluntary petitions for relief under Chapter 11 of the Bankruptcy Code were filed on September 9, 2024.
• A motion was filed on October 24, 2025, seeking to convert Chapter 11 Cases to Chapter 7 Cases.
• A hearing on the motion to convert to Chapter 7 is scheduled for November 4, 2025.

Stakeholder Impact

• Shareholders: Expected to receive no proceeds, and common shares are believed to be worthless, representing a complete loss of investment.
• Creditors: The conversion to Chapter 7 is believed to be in their best interests, with a trustee appointed to liquidate assets for their benefit according to Chapter 7 priorities.
• Employees: Implied cessation of operations and management by the Debtors, likely leading to further job losses beyond previous bankruptcy actions.

Next Steps

• A hearing on the motion to convert to Chapter 7 is scheduled for November 4, 2025.
• If approved, the Chapter 11 Cases will convert to Chapter 7 Cases, and a trustee will be appointed.
• The Chapter 7 trustee will liquidate the Debtors' remaining assets.
• The company expects to cease filing reports under the Securities Exchange Act of 1934, unless directed by the Chapter 7 trustee.

Key Dates

Recommendation

The company is moving to Chapter 7 liquidation, explicitly stating that common shares are believed to be worthless and no proceeds are expected for shareholders. This indicates a complete loss of equity value, making a 'strong sell' recommendation appropriate for any remaining shares, though their value is already considered zero.

Keywords

Big Lots, Former BL Stores, Bankruptcy, Chapter 11, Chapter 7, Liquidation, SEC Filing, 8-K, Retail Bankruptcy, Shareholder Loss, Worthless Stock