Frank’s Not Finished?
After filing Chapter 11 twice, closing all of its stores and laying off almost all of its employees, Frank’s Nursery & Crafts Inc. may not go under after all. The company had “planned to liquidate all its holdings at an auction in February,” according to a January 18, 2005 article from Crain’s Detroit Business. New reports, however, indicate that Frank’s may not be finished just yet, though the company is not attracted by the retail aspect of the business.
The Crain’s article stated, “Michael McBride, Frank’s vice president of real estate and general counsel, said that the retailer owns 62 stores and may emerge from Chapter 11 protection as a real estate holding company or landlord.”
When Frank’s decided to file Chapter 11, for the second time, in September of 2004, the retailer had 169 stores. According to Crain’s, Frank’s “has either sold or ceded its rights to most of the 107 stores it was leasing back to the landlords and completed its going-out-of business sales Dec. 31, 2005.” McBride told Crain’s; “We’ve delayed that (auction) while we investigate whether we may be able to do something else with the stores though a reorganized company.”
According to the article, McBride told Crain’s that Frank’s would like to reorganize after speaking to a number of real estate experts about the value of the stores it owns. “McBride said Frank’s is in discussions with New Hyde Park, N.Y.-based Kimco Realty Corp. and other creditors about its possible reorganization plan.”
At this point, “Kimco is Frank’s largest shareholder, with 52 percent of its outstanding shares. Plus, Kimco Capital Corp. granted Frank’s a $27.5 million line of credit to use while in bankruptcy,” according to Crain’s.