Big Lots has been approved to sell 200 to 400 stores at the last minute, according to Reuters.

By Dietrich Knauth

NEW YORK (Reuters) – Retailer Big Lots (NYSE: ) on Tuesday won approval from a bankruptcy judge for a last-minute sale that will allow 200 to 400 stores to remain open under new ownership.

U.S. Bankruptcy Judge Kate Stickles approved the sale at a court hearing in Wilmington, Delaware, saying the deal was the best option for Big Lots after a previous sale agreement fell apart.

Big Lots filed for bankruptcy protection in September, seeking to sell the business to private equity firm Nexus Capital. But that deal fell apart earlier this month, prompting Big Lots to begin going out of business at its roughly 900 remaining stores in preparation for the company’s closure.

Big Lots lined up a reserve contract after Christmas, partnering with investment firm Gordon Brothers Retail Partners to sell its stores, distribution centers and intellectual property. The privately-owned retailer’s various wholesalers have agreed to buy 200 to 400 Big Lots stores as part of the deal.

The sale is expected to save 5,000 to 10,000 jobs and keep the company’s brand alive, Big Lots reported.

But the leveraged buyback won’t provide enough cash to fully repay Big Lots’ sellers, such as mattress makers Tempur Sealy (NYSE: ) and Serta Simmons, which continued to sell goods after Big Lots filed for bankruptcy.

Many of the sellers opposed the sale, arguing that Gordon Brothers should not be allowed to take over the Big Lots properties if the company could not pay the sellers.

Beth Rogers, a lawyer for Certa (NYSE: ) said on Tuesday that Big Lots continued to order furniture and other items even after realizing it had no money to pay, raising $250 million in potential new liabilities. Unpaid by the revised sales agreement.

When Big Lots filed for bankruptcy, it was the fourth-largest home furnishings retailer in the U.S., with 1,300 stores, $4.7 billion in 2023 revenue and more than 27,000 employees. The company has been struggling with declining sales over the past few quarters, which has put pressure on its balance sheet, which is already $556.1 million in debt, according to court documents.