Mountain Sports LLC: EMS and Bob's Stores Liquidation

Mountain Sports LLC, the parent company of Eastern Mountain Sports and Bob's Stores, filed chapter 11 petitions on June 18, 2024 in the U.S. Bankruptcy Court for the District of Delaware after its primary lender cut off funding. The case moved quickly from an emergency cash-collateral and sale process to a going-concern transfer of substantially all assets to UK-based Mountain Warehouse Limited, followed by going-out-of-business sales at remaining locations. With the sale complete and the estates in wind-down mode, the debtors and the official committee of unsecured creditors have jointly proposed a liquidating plan projecting recoveries of less than 3% for general unsecured creditors on an estimated $35 million to $40 million claim pool. A confirmation hearing is scheduled for March 31, 2026.

PNC Bank declared a default, seized dominion over cash and receivables, and stopped funding operations, leaving the debtors with no path to continue outside of bankruptcy. The debtors used the chapter 11 case to obtain cash-collateral access, sell substantially all assets to Mountain Warehouse, and wind down the remaining operations. On the eve of the confirmation hearing, the plan proponents filed a confirmation brief and proposed findings of fact and confirmation order, reporting that all objections have been resolved and requesting that the court waive the 14-day stay so the confirmation order takes effect immediately upon entry.

Debtor(s)	Mountain Sports LLC (5 jointly administered entities)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-11385
Petition Date	June 18, 2024
Judge	Hon. Mary F. Walrath

Lender Default and Liquidity Crisis

Mountain Sports and its affiliates operated approximately 50 retail locations and e-commerce platforms under the Eastern Mountain Sports and Bob's Stores brands in the northeastern United States. EMS marketed to outdoor enthusiasts seeking functional outerwear and gear at value prices, while Bob's Stores targeted moderate-income customers with footwear, workwear, teamwear, and activewear. The companies were headquartered at 160 Corporate Court in Meriden, Connecticut, though the emergency cash-collateral motion noted the debtors also maintained distribution operations at that facility. As of the petition date, the debtors employed about 771 full-time and part-time employees and reported 2023 net revenue of $131.85 million. The First Day Declaration further disclosed average biweekly gross payroll of approximately $770,000, unpaid wage obligations of about $935,000, accrued unpaid payroll taxes of roughly $160,000, and estimated insurance and healthcare obligations of about $431,000.

The five debtor entities in the case are Mountain Sports, LLC; SDI Stores, LLC; SDI Gift Card, LLC; Bob's Stores USA, LLC; and Mountain Sports USA, LLC. Mountain Sports LLC reported assets of $10 million to $50 million, while SDI Stores LLC reported liabilities of $50 million to $100 million. The debtors held approximately $37.27 million in gross inventory as of the petition date.

PNC Bank, National Association was the senior secured lender and held first-priority liens on inventory, receivables, and cash. The debtors reported approximately $29.4 million owed to PNC, consisting of roughly $24.9 million on a revolving credit facility and $4.5 million on a FILO tranche, plus about $26.67 million of aggregate unsecured debt. The 20 largest unsecured creditors held claims ranging from approximately $108,000 (Google) to $472,000 (Yell Steel Enterprise).

The First Day Declaration ties the filing to a lender-driven liquidity crisis. PNC declared a default under the loan agreement on March 29, 2024, began exercising dominion over cash and receivables, and stopped funding the debtors on or about June 12, 2024 after unsuccessful restructuring discussions. Without access to operating cash, the debtors told the court they needed immediate chapter 11 relief to keep paying payroll, utilities, rent, and other critical operating costs. The debtors filed an emergency cash-collateral motion on the petition date itself, seeking interim authority to use PNC's cash collateral under a court-approved budget and offering adequate protection in the form of replacement liens and a superpriority administrative claim.

PNC Cash-Collateral Objection and Resolution

Cash collateral was contested from the outset. On July 18, 2024, PNC objected to the debtors' continued use of cash collateral, arguing that the debtors were burning collateral to fund an unsupportable sale process, that budgets showed material diminution in value, and that the debtors had not provided adequate protection for disputed intellectual property and related collateral. PNC argued that immediate liquidation would maximize value better than the debtors' proposed path.

That dispute was resolved five days later. The final agreed cash-collateral order entered July 23, 2024 authorized use of cash collateral under an approved budget, subject to a 10% aggregate disbursement variance and carry-forward of unused budgeted amounts. PNC received adequate-protection liens, a section 507(b) superpriority administrative claim, and payment of reasonable professional fees and expenses through the budget, all subject to a carve-out. The order also included a challenge period, waivers of surcharge and the equities-of-the-case exception, and anti-marshaling language. The cash-collateral framework was expressly tied to the sale-process budget, effectively conditioning the debtors' operational runway on completing a transaction within the court-approved timeline.

Sale Process and Mountain Warehouse Acquisition

The debtors and the unsecured creditors' committee used chapter 11 primarily to run a fast sale process. Their July 15, 2024 bid-procedures motion sought authority to market all or substantially all assets under an accelerated timeline: August 2 indication-of-interest deadline, August 9 stalking-horse designation deadline, August 20 bid deadline, August 22 auction if needed, August 29 sale hearing, and August 30 closing deadline. The court entered the bidding-procedures order on July 23, 2024, the same day it approved the final cash-collateral order, locking in the accelerated sale calendar.

The bid-procedures motion also built in a liquidation fallback. If no qualified indication of interest emerged, the debtors said they would transition to a full-chain liquidation, and if no qualified indication of interest covered Bob's Stores assets, those assets would be liquidated separately.

On August 1, 2024, the debtors selected Mountain Warehouse Limited as stalking horse. The stalking-horse asset purchase agreement included a $5 million cash component for intellectual property, 75% of cost basis for designated store inventory and additional inventory categories, $5,000 each for two vehicles, payment of cure amounts for designated contracts, and an $800,000 deposit. Closing was to occur within one day after entry of the sale order and no later than August 30, 2024 unless extended by agreement. The court approved the stalking-horse agreement and bidding protections the following week.

No competing qualified bids were submitted by the August 20, 2024 bid deadline, and the auction was canceled. The sale order was entered August 29, 2024, authorizing the sale free and clear with closing tied to the purchase agreement and an outside date of August 30, 2024. Mountain Warehouse, a UK-based retailer operating more than 350 stores worldwide with a U.S. presence spanning over a decade across locations in New York, Illinois, Michigan, and Canada, acquired substantially all assets including seven operating locations under the EMS brand. Going-out-of-business sales for the remaining stores concluded on September 30, 2024 — part of a broader wave of retail closures and bankruptcies that year — and the remaining real property leases were rejected. The later plan-solicitation motion confirmed that the sale result was a transfer of substantially all assets to Mountain Warehouse and that the GOB process for non-acquired locations was complete.

Liquidating Plan and Creditor Recoveries

With the sale complete, the case shifted to a liquidating-plan track jointly proposed by the debtors and the official committee. The plan proponents initially filed a combined disclosure statement and plan on October 8, 2025, followed by a modified version on October 27, 2025. The modified combined disclosure statement and plan (solicitation version) filed January 14, 2026 establishes the following class treatment:

Class 1 — Priority Non-Tax Claims	Unimpaired; projected 100% recovery on an estimated $0 to $350,000 pool
Class 2 — General Unsecured Claims	Impaired; projected 0.8% to 2.2% recovery on an estimated $35 million to $40 million pool
Class 3 — Insider Claims	Impaired; projected 0% to 1.4% recovery on an estimated $0 to $23 million pool
Class 4 — Intercompany Claims	Impaired; deemed to reject; 0% recovery
Class 5 — Equity Interests	Canceled

PNC's secured claim was paid in full during the case. The plan proposes deemed substantive consolidation of the debtor entities for voting and distribution purposes.

The plan contemplates an MS Liquidating Trust to receive estate cash and retained causes of action on the effective date. The trust will administer and monetize trust assets, resolve disputed claims, and distribute value to allowed Class 2 and Class 3 claimants. The first plan supplement identifies Sean C. Southard as the initial liquidating trustee. Under Article IX of the plan, the debtors, the committee, and their respective professionals are exculpated from liability for acts taken in connection with the chapter 11 cases, subject to a carve-out for actual fraud, willful misconduct, and gross negligence.

Voting results filed March 3, 2026 show Class 2 accepted the plan: accepting ballots represented $5,316,791.93, or 99.57% in amount, and 37 ballots, or 94.87% in number. Only two rejecting ballots were cast, representing $23,061.87. No Class 3 ballots were cast. The confirmation brief filed March 5, 2026 argues that the plan satisfies all requirements of section 1129 of the Bankruptcy Code, including the best-interests test under section 1129(a)(7). The plan proponents note that because the plan is already a liquidating plan, creditors could not fare better in a chapter 7 conversion, where additional trustee fees, professional costs, and distribution delays would reduce the net proceeds available. The brief also invokes the cram-down provisions of section 1129(b) for Classes 4 and 5, which are deemed to have rejected the plan, asserting that the plan does not unfairly discriminate and is fair and equitable with respect to those classes.

On March 10, 2026, the plan proponents filed a proposed confirmation order attaching proposed findings of fact, conclusions of law, and an order both approving the adequacy of disclosures on a final basis and confirming the plan. The filing indicates the plan proponents intend to present this proposed order to the court at the March 31 hearing and have requested waiver of the 14-day stay under Bankruptcy Rule 3020(e) so the confirmation order would take effect immediately.

GoDigital Ownership and Plan Objection

The debtors are ultimately owned by GoDigital Media Group through several intermediate holding companies, and the relationship between the debtors and their parent entities generated disputes during both the sale process and plan confirmation.

The plan drew an objection from Roberts 50 USA, LLC and GoDigital Media Group, LLC. Their October 27, 2025 filing argued that the plan improperly gerrymandered section 1129(a)(10) by placing them alone in an insider class with the same economic treatment as Class 2, challenged the deemed substantive consolidation structure, and said the disclosure statement lacked adequate information because key financial details would be deferred to the plan supplement.

That objection was later resolved. A January 22, 2026 notice of withdrawal states that Roberts 50 and GoDigital withdrew their objection to the combined-plan solicitation motion and tabulation procedures. The confirmation brief filed March 5, 2026 confirms that all objections to the plan have been resolved, with no continuing objections outstanding as of that date.

Claims Litigation

By the December 20, 2024 bar date, approximately 1,131 proofs of claim had been filed. Claims administration and litigation continued through early 2026. On March 9, 2026, the court entered an order granting the debtors' fifth omnibus claim objection, which reclassified certain misclassified claims and reduced and allowed one substantive claim. The court also entered an order approving a stipulation setting the amount and nature of the claims of Chubb Insurance Companies. The rescheduled hearing agenda filed March 6, 2026 shows additional claims litigation matters, including an objection to the Somerset County Shopping Center claim and other omnibus claim-objection matters, all set for the March 31, 2026 hearing alongside confirmation.

Professional Retentions and Interim Fee Applications

Debtors' counsel. Goldstein & McClintock LLLP, with Maria Aprile Sawczuk as lead counsel, represents the debtors. Silverman Consulting serves as the debtors' financial advisor.

Committee counsel. Lowenstein Sandler LLP, led by Jeffrey Cohen, Brent Weisenberg, Erica G. Mannix, and Chelsea Frankel, and Morris James LLP represent the official committee of unsecured creditors. The confirmation brief identifies the committee's five members as Amer Sports Winter and Outdoor Co., Ariat International, Inc., Marmot Mountain LLC, Oboz Footwear LLC, and VF Corp. The committee urged general unsecured creditors to vote in favor of the plan. Emerald Capital Advisors serves as the committee's financial advisor and investment banker.

Professional fee activity continued into 2026. Goldstein & McClintock filed a sixth interim fee application on March 6, 2026 seeking $78,775.00 in fees and $964.34 in expenses for the October through December 2025 period. Lowenstein Sandler filed its own sixth interim fee application on March 5, 2026 seeking $87,275.30 in fees and $1,519.14 in expenses for the same period. Under the plan, all requests for professional fee claims incurred through the effective date must be filed within 30 days after the effective date and remain subject to court approval.

Key Timeline

June 18, 2024	Mountain Sports and affiliates filed chapter 11 petitions
June 18, 2024	Debtors filed emergency cash-collateral motion
July 3, 2024	U.S. Trustee appointed the official committee of unsecured creditors
July 15, 2024	Debtors and committee filed the sale and bid-procedures motion
July 18, 2024	PNC objected to continued use of cash collateral
July 23, 2024	Court entered the final agreed cash-collateral order and bidding-procedures order
August 1, 2024	Mountain Warehouse selected as stalking-horse bidder
August 29, 2024	Court entered the sale order
September 30, 2024	Going-out-of-business sales concluded
December 20, 2024	General claims bar date
October 8, 2025	Plan proponents filed initial combined disclosure statement and plan
January 14, 2026	Modified combined disclosure statement and plan (solicitation version) filed
January 22, 2026	Roberts 50 and GoDigital withdrew their plan objection
February 27, 2026	First plan supplement filed with liquidating trust agreement
March 3, 2026	Voting tabulation filed showing 99.57% Class 2 support by amount
March 5, 2026	Confirmation brief filed; all objections resolved
March 9, 2026	Court granted fifth omnibus claim objection
March 10, 2026	Proposed confirmation order filed
March 31, 2026	Scheduled confirmation hearing

Frequently Asked Questions

What happened to Eastern Mountain Sports and Bob's Stores?

Mountain Sports LLC, the parent company of Eastern Mountain Sports and Bob's Stores, filed chapter 11 in June 2024 after PNC Bank cut off funding. The debtors sold substantially all assets, including seven operating locations, to UK-based Mountain Warehouse Limited in August 2024. The remaining stores closed after going-out-of-business sales ended September 30, 2024. The case is now in the liquidating-plan stage, with a confirmation hearing scheduled for March 31, 2026. All objections to the plan have been resolved, and the plan proponents have filed proposed findings of fact and a proposed confirmation order.

Who is the claims agent for Mountain Sports LLC?

Epiq Corporate Restructuring, LLC serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

What will creditors recover in the Mountain Sports bankruptcy?

Under the proposed liquidating plan, general unsecured creditors holding an estimated $35 million to $40 million in claims would receive projected recoveries of 0.8% to 2.2%. PNC Bank's secured claim has been paid in full. Insider claims would receive 0% to 1.4%, while intercompany claims and equity interests would receive nothing. The plan proponents argue in their confirmation brief that creditors would fare worse in a chapter 7 liquidation due to additional trustee fees, professional costs, and distribution delays.

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