As Trade Only Today has reported this week, West Marine filed for Chapter 11 bankruptcy May 17 in U.S. Bankruptcy Court for the District of Delaware. Additionally, the company owes its top 30 unsecured creditors $65-plus million, according to court documents, while CEO Paulee Day assured vendors in a virtual town hall that West Marine is “not liquidating.”

So what happens next?

On the day of the bankruptcy filing, West Marine filed a series of “first day” motions in U.S. Bankruptcy Court for the District of Delaware (Case No. 26-10794). A first-day motion (also called a “first-day filing”) in bankruptcy refers to a set of urgent requests filed by a debtor (usually in a Chapter 11 reorganization case) either on the same day as the bankruptcy petition or within one to two days afterward.

Interim relief was granted following a May 19 hearing, allowing the company to continue key operations on a temporary basis.

The debtors are seeking court authorization for standard Chapter 11 relief in the following ways, according to the filing:

  • Customer Programs: Continue gift cards, loyalty programs and honor related prepetition obligations.
  • Insurance and Surety: Maintain existing insurance policies, surety bonds and letters of credit, and pay related amounts.
  • Taxes and Fees: Pay certain prepetition and post-petition taxes and fees.
  • Utilities: Provide adequate assurance of payment to prevent utility providers from shutting off service.
  • Stock Trading Procedures: Implement notification and hearing procedures for transfers of common stock and declarations of worthlessness.
  • Employee Obligations: Pay prepetition wages, salaries, benefits, reimbursable expenses and workers’ compensation claims.
  • Confidentiality: Redact customer and personally identifiable information and authorize electronic noticing.
  • Critical Vendors: Pay prepetition claims of critical vendors, 503(b)(9) claimants, lien holders and HSE suppliers; grant administrative expense priority for outstanding orders.
  • Cash Management: Continue operating the existing cash management system, perform intercompany transactions and maintain business forms.
  • Cash Collateral and Financing: Use cash collateral, grant liens and superpriority claims, and provide adequate protection to prepetition secured lenders (including Eclipse as ABL and FILO agent).

Additionally, the company has asked the court to authorize banks to honor and process related checks and transfers.

Objections against the motions are due to the court by June 2 at 4 p.m. (ET). A final hearing on these motions is scheduled for June 11 at 2 p.m. (ET). Day said this week that the company hopes to emerge from Chapter 11 bankruptcy in mid-to-late August.

Copies of the motions and interim orders are available free of charge on the claims agent’s website. Proposed legal representation for West Marine is by Kirkland & Ellis LLP and Young Conaway Stargatt & Taylor, LLP. The case is assigned to Judge Karen B. Owens.