West Marine Bankruptcy: $549.2M in Debt, Dual-Track Plan Targets July Confirmation

West Marine, Inc. and its affiliated debtors filed prenegotiated chapter 11 petitions on May 17, 2026 in the U.S. Bankruptcy Court for the District of Delaware (lead case 26-10794-KBO), arriving with a fully executed Restructuring Support Agreement and the plan, disclosure statement, and sale documents already on file. The RSA built a toggle into the case: a standalone Recapitalization Transaction unless a competing sale offered more value. That toggle has since resolved. The Debtors received no Qualified Bids by the RSA's June 26, 2026 bid deadline, cancelled the scheduled auction, and are proceeding solely with the Recapitalization Transaction, under which $251.2 million of Term Loan Claims convert into 100% of the reorganized equity. The Combined Confirmation Hearing, originally set for July 30, has been pushed to August 11, 2026.

The filing followed two pre-petition out-of-court recapitalizations executed by the sponsor group in 2023 and a month-long marketing process led by Portage Point Securities. The RSA carried support from 100% of Prepetition FILO Claims, 96.2% of Term Loan Claims, and 93.9% of existing equity interests. General unsecured creditors face a "death-trap": the amended Disclosure Statement projects $99.3 million to $109.2 million of Class 6 claims recovering 0.2%–0.3% if the class accepts the plan, and nothing if it rejects. The case's most recent contested matter is a Rule 2004 discovery dispute: the seven-member creditors' committee is challenging the plan's proposed releases and probing the 2017, 2021, and 2023 transactions that built West Marine's capital structure, over the Debtors' objection that the request amounts to premature confirmation discovery.

Debtor	West Marine, Inc. (jointly administered with affiliates)
Court	U.S. Bankruptcy Court, District of Delaware (Wilmington Division)
Case Number	26-10794-KBO
Petition Date	May 17, 2026
Plan Type	Standalone Recapitalization Transaction (sale toggle resolved; no Qualified Bids received)
RSA Signed	May 17, 2026
Total Funded Debt	~$549.2 million
Cash Collateral	Consensual; no DIP; ~$21.5 million petition cash; weekly excess-cash sweep above $20.0 million
Creditors' Committee	Appointed May 29, 2026 (7 members)
Combined Confirmation Hearing	August 11, 2026 (rescheduled from July 30, 2026)
Claims Agent	Kurtzman Carson Consultants, LLC dba Verita Global

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From Mail-Order Rope Seller to Sponsor-Backed Retail Restructuring

West Marine was founded in 1968 in Sunnyvale, California, by Randy Repass, who began selling marine-grade nylon rope by mail order under the name "West Coast Ropes." The company went public on NASDAQ on November 19, 1993 and was taken private on September 12, 2017. As of the petition date, West Marine operates approximately 200 retail stores and employs approximately 2,600 "Crew Members" out of headquarters at 1 East Broward Blvd., Suite 200, Fort Lauderdale, Florida. eCommerce contributed approximately 8% of 2025 revenue, with the balance coming from brick-and-mortar sales of core boating maintenance, electronics, safety, hardware, and adjacent lifestyle and apparel categories.

The 2017 take-private was followed in March and September 2023 by two out-of-court balance-sheet recapitalizations that equitized approximately $660 million of existing term loan debt and brought in $275 million of new liquidity. The sponsor contributed roughly two-thirds of $125 million of new-money capital in exchange for approximately 33% of newly issued common stock and retained control. 1A Term Loan holders received their pro rata share of 10% of the new common stock (subject to MIP dilution); 1B and 2A Term Loan holders received warrants. The sponsor group is controlled by Oaktree and L Catterton, and workout talks over the lease-heavy capital structure were already underway by late April 2026.

Lease Burden, Weather, and Post-Pandemic Discretionary Pullback

CEO Paulee Day's First Day Declaration attributes the pre-filing distress to a stack of overlapping pressures rather than a single triggering event. Severe weather during the 2024 and 2025 peak boating summers depressed sales and inventory turn at the retailer's core seasonal stores. A pandemic-era push into lifestyle and discretionary product categories left the company with aging inventory once consumer demand normalized. Inflation, broader macroeconomic volatility, and what the declaration calls a "suboptimal retail footprint" compounded the operating pressure. Trade press had been tracking the deteriorating outlook since early May 2026, and reporting that month flagged a pending chapter 11 filing to restructure debt and close stores.

The single largest cost driver named in the declaration is rent. Approximately 200 store leases require approximately $55 million in annual rent payments, which the declaration calls an "insurmountable obstacle" against the reduced post-pandemic revenue base. The lease load was the central driver of the chapter 11 per filing-day trade coverage, and the filing is paired with another round of store closures on top of the wind-down work already underway.

$549.2M Capital Stack Across ABL, FILO, and Three Term Loan Tranches

Total funded debt as of the petition date is approximately $549.2 million across three secured facilities, plus approximately $119.9 million of unsecured trade and lease obligations. Eclipse Business Capital LLC serves as agent on both the ABL Revolver and the FILO facility, and Wilmington Savings Fund Society, FSB serves as Super-Priority Agent on the Term Loan Facility.

Facility	Commitment	Outstanding	Agent	Maturity
ABL Revolver	$165.0 million	$118.9 million	Eclipse Business Capital LLC	May 1, 2028
FILO	$45.0 million	$59.2 million	Eclipse Business Capital LLC	May 1, 2028
Term Loan Facility (Tranche A / B / C)	—	$251.2 million total	Wilmington Savings Fund Society, FSB	June 13, 2028
Unsecured trade & lease	—	$119.9 million	—	—

Within the Term Loan stack, the First Day Declaration identifies Tranche B at approximately $146.8 million initial principal and Tranche C at approximately $700,876 initial principal, with Tranche A senior in priority to the junior tranches. ABL liens are senior on ABL Priority Collateral and junior on Term Loan Priority Collateral; the reverse is true for the Term Loan Facility. Filing-day analysis framed the case as a $549.2 million dual-track restructuring on a 95-day clock.

No Qualified Bids: RSA Toggle Resolves to Recapitalization

The Restructuring Support Agreement, executed on the petition date, carried Consenting Stakeholder support from 100% of Prepetition FILO Claims, 96.2% of Term Loan Claims, and 93.9% of existing equity interests in West Marine. The RSA built in a toggle: a standalone Recapitalization Transaction would proceed unless the Debtors determined a Sale Transaction would deliver greater value, in which case the case would pivot to a section 363 sale of "some or all" of the Debtors' assets, free and clear of liens, claims, interests, and encumbrances.

The sale track drew on a marketing process Portage Point Securities LLC had already run since April 2026, developing a confidential information memorandum and contacting potential buyers about a sale of all or substantially all assets. The Bidding Procedures and Sale Motion sought bidding-procedures approval without naming a stalking horse at filing, instead asking for authority to enter into Stalking Horse Purchase Agreements during the case, with a bid deadline of June 26, 2026 and an auction scheduled for June 29, 2026 if qualified bids arrived.

None did. The Debtors received no Qualified Bids for any assets or portion of assets by the June 26 deadline, cancelled the scheduled auction, and formally elected to proceed with the standalone Recapitalization Transaction. Under that path, Term Loan Claims convert to 100% of the New Equity Interests in Reorganized West Marine, subject to dilution from the Management Incentive Plan, and the company is slated to emerge with a $7.5 million post-emergence exit facility, upsizable to $10 million with an additional $15 million of capacity available.

Store footprint wind-down continues regardless of track. Hilco Merchant Resources, LLC and Hilco Real Estate, LLC were retained on May 10, 2026 — one week before the petition — to act as inventory liquidator and real estate advisor. The Court entered a Store Closing Order on June 9, 2026 authorizing store-closing sales at designated locations, and the Debtors followed with a Second Notice of Store Closings on June 24, 2026 covering 33 additional locations. Contemporaneous trade coverage put the broader closure program at 59 stores across 23 states out of the roughly 200-store footprint, with the company maintaining that stores remain open pending individual closure notices.

No DIP, Cash Collateral Only, and a Weekly Sweep to the ABL Agent

The Debtors filed without a DIP facility, relying instead on consensual use of cash collateral. The Cash Collateral Motion and the supporting declaration of Amir Agam — the Debtors' financial advisor declarant — explain that the company entered the case with approximately $21.5 million of cash on hand and that the 13-week Initial Budget anticipates average weekly disbursements of approximately $12.5 million. With no new-money financing in the case, the cash collateral order is the operative liquidity governance document.

The adequate protection package for both the ABL and Term Loan Agents includes replacement liens on Adequate Protection Collateral subject to a standard Carve Out, section 507(b) superpriority administrative claims, current cash payment of reasonable prepetition and postpetition agent fees and expenses, and interest at the applicable contractual non-default rate. Interest is paid in cash for the ABL Obligations (first payment due June 1, 2026) and paid in kind for the Term Loan Obligations. A standard professional-fee Carve Out applies, with a Post-Carve Out Trigger Notice Cap.

The cash collateral order also imposes an excess cash sweep. Any consolidated cash balance above $20.0 million (excluding the Funded Reserve Account) is remitted to the Prepetition ABL Agent weekly. The Debtors must perform a weekly reconciliation each Saturday and wire the excess by 2:00 p.m. Eastern Time the following Tuesday.

First monthly operating report. The Debtors filed their first monthly operating reports on June 26, 2026, covering the stub period from the May 17 petition date through May 31, 2026. Consolidated schedules reported approximately $574.0 million of total assets against approximately $816.5 million of total liabilities — $541,954,735 of liabilities subject to compromise and $167,231,265 not subject to compromise. Cash grew from a $20,971,844 opening balance to $36,418,057 at period end on total receipts of $17,909,331 against disbursements of $2,463,118, producing a net profit of approximately $99,000 for the period.

Ten Plan Classes, Term Loan Equitization, and the GUC Death-Trap

The Joint Plan classifies claims into ten classes, with treatment toggled between the Recapitalization Transaction and the Sale Transaction. The Disclosure Statement's class table sets out projected allowed amounts and recoveries:

Class	Claim/Interest	Projected Allowed Amount	Projected Recovery	Impaired	Voting
1	Other Secured Claims	TBD	100%	No	Presumed Accept
2	Other Priority Claims	$9.9 million	100%	No	Presumed Accept
3	Prepetition ABL Claims	$118.9 million	100%	Yes	Entitled to Vote
4	Prepetition FILO Claims	$59.2 million	100%	Yes	Entitled to Vote
5	Term Loan Claims	$251.2 million	TBD	Yes	Entitled to Vote
6	General Unsecured Claims	$99.3M–$109.2M	0.2%–0.3% (if accepted)	Yes	Entitled to Vote
7	Section 510(b) Claims	TBD	TBD	Yes	Deemed Reject
8	Intercompany Claims	TBD	TBD	Reinstated or Cancelled	Not Voting
9	Intercompany Interests	TBD	TBD	Reinstated or Cancelled	Not Voting
10	Interests in West Marine	—	—	Yes	Deemed Reject

Term Loan equitization (Class 5). Under the Recapitalization, Term Loan holders receive their pro rata share of 100% of the New Equity Interests in Reorganized West Marine, subject to dilution by the Management Incentive Plan. The $251.2 million Term Loan stack is the single largest impaired claim pool and the entirety of the post-emergence equity now sits with these holders since the sale toggle resolved against a competing transaction.

ABL and FILO (Classes 3 and 4). Under the Recapitalization, the $118.9 million ABL claims and $59.2 million FILO claims are either paid in full in cash or converted dollar-for-dollar into Exit ABL Facility and Exit Term Loan Facility loans.

General Unsecured (Class 6) — death-trap. Class 6 is structured as a "death-trap": if Class 6 votes to accept the plan, holders share pro rata in $250,000 of GUC Cash; if Class 6 rejects, GUC claims are cancelled with no distribution. The amended Disclosure Statement and accompanying Liquidation Analysis, filed June 23, 2026, estimate Class 6 claims at $99.3 million to $109.2 million and project a 0.2%–0.3% recovery if the class accepts — which the Liquidation Analysis states still exceeds the zero recovery general unsecured creditors would receive in a hypothetical chapter 7 liquidation. The petition lists Garmin International, Inc. as the largest single unsecured trade creditor at approximately $8.57 million, followed by Virtual Supply, Inc. ($5.8 million), Sierra International, Inc. ($4.7 million), and East Penn Manufacturing Co., Inc. ($4.43 million).

Existing equity (Class 10) and third-party releases. Class 10 is deemed to reject, but equityholders nonetheless include the Consenting Equity Holders supporting the RSA at the 93.9% level. The Plan uses an opt-out construct for voting classes and an opt-in construct for deemed-reject classes; failure to affirmatively opt out results in being deemed a Releasing Party. Released Parties include the Debtors, Reorganized Debtors, Plan Administrator, Agents, Consenting Term Loan, FILO, and ABL Lenders, Consenting Equity Holders, and their Related Parties. The creditors' committee has since moved to test the adequacy of these releases through Rule 2004 discovery, described below.

Creditors' Committee Challenges Plan Releases Via Rule 2004

The U.S. Trustee appointed a seven-member Official Committee of Unsecured Creditors on May 29, 2026 under section 1102(a)(1), comprising Realty Income Corporation, Facility Solutions Group, Inc., Modern Recreational Technologies, Inc., East Penn Manufacturing Co., Virtual Supply, Inc., Lippert Components, Inc., and Garmin USA, Inc.

On June 26, 2026 — the same day the sale toggle resolved — the Committee moved under Bankruptcy Rule 2004 for an order directing the Debtors and their Special Committee to produce documents and information, arguing the Debtors' production to date had been "woefully incomplete." The motion targets the Debtors' prepetition liens, the events and transactions leading to the filing, and the conduct of the "Released Parties," with the stated goal of testing the Plan's proposed estate releases and the adequacy of value offered to unsecured creditors ahead of confirmation.

The transactions under scrutiny include the 2017 leveraged buyout by Monomoy Capital Partners, the 2021 acquisition by L Catterton that substantially increased secured debt, and the two 2023 out-of-court liability-management transactions that equitized approximately $660 million of term loan debt. The Debtors had already formed a Special Committee in April 2026 that retained Young Conaway Stargatt & Taylor to investigate potential fraudulent-transfer, preference, breach-of-fiduciary-duty, fraud, recharacterization, and equitable-subordination claims against Related Parties — and concluded no cause of action was "worthy of pursuit." The Creditors' Committee is challenging that conclusion directly, seeking the Special Committee's underlying analysis, interview notes, and document set, plus authority to take depositions.

The Debtors objected on July 1, 2026, arguing the Committee was using Rule 2004 as accelerated confirmation discovery that exceeded the rule's proper scope, and that the Debtors and Special Committee had already produced or offered document categories, interview-finding summaries, and meet-and-confer narrowing. The amended hearing agenda set the matter for a status conference rather than a merits hearing, leaving the discovery dispute unresolved ahead of the August 11 confirmation hearing.

A second, smaller contested matter. Harken Incorporated objected on July 1, 2026 to cure amounts listed in the Debtors' notice of potential contract assumption and assignment, arguing that unpaid invoice amounts in its supporting exhibit should be included in any cure obligation if the Debtors assume the relevant agreements.

Confirmation Track Reset to August 11 and Key Timeline

The RSA's original milestones targeted confirmation within roughly 80 days of the petition, or about August 5, 2026. After conditional approval of the Disclosure Statement on June 23, 2026, the Debtors reset the Combined Confirmation and Sale Hearing to August 11, 2026, with the plan and disclosure statement objection deadline set for August 3 and the voting deadline for July 31.

Date	Event
April 2026	Portage Point Securities engaged; prepetition marketing process launched; Special Committee formed to investigate potential estate claims
May 10, 2026	Hilco Merchant Resources and Hilco Real Estate engaged
May 17, 2026	Petition Date; RSA executed; first-day motions filed
May 18, 2026	Plan, Disclosure Statement, Bidding Procedures, Combined Hearing, and Bar Date motions filed; Joint Administration ordered
May 29, 2026	U.S. Trustee appoints seven-member Creditors' Committee
June 9, 2026	Store Closing Order entered
June 22, 2026	Voting Record Date
June 23, 2026	Conditional Disclosure Statement/solicitation order entered; Amended Plan and Disclosure Statement filed
June 24, 2026	Second Notice of Store Closings (33 additional locations) filed; Committee professional-retention applications filed
June 26, 2026	Bid deadline passes with no Qualified Bids; auction cancelled; first Monthly Operating Reports filed; Committee files Rule 2004 motion
June 29, 2026	Scheduled auction date (cancelled); Order Shortening Notice on Rule 2004 motion entered
July 1, 2026	Debtors object to Rule 2004 motion; status conference set; Harken cure objection filed; retention orders entered for Portage Point, Verita (administrative advisor), and PwC Tax; interim compensation procedures approved
July 13, 2026, 11:59 p.m. ET	General Claims Bar Date
July 21, 2026	Plan Supplement filing deadline
July 31, 2026, 4:00 p.m. ET	Voting Deadline
August 3, 2026, 4:00 p.m. ET	Plan/Disclosure Statement Objection Deadline
August 11, 2026, 10:00 a.m. ET	Combined Confirmation Hearing
November 13, 2026, 11:59 p.m. ET	Governmental Bar Date

Advisors, Lender Counsel, and Bar Dates

Kirkland & Ellis LLP is leading the chapter 11 cases as Debtors' counsel, with Matthew C. Fagen, P.C., Michael P. Esser, Brian J. Nakhaimousa, and Trevor Eck admitted pro hac vice. Young Conaway Stargatt & Taylor, LLP serves as Delaware co-counsel and conflicts counsel. Portage Point Securities was retained as investment banker effective the petition date by an order entered July 1, 2026; FTI Consulting is financial advisor; and Hilco Merchant Resources and Hilco Real Estate are inventory liquidator and real estate advisor. Kurtzman Carson Consultants, LLC dba Verita Global serves as claims and noticing agent and was separately retained as administrative advisor by a July 1, 2026 order. PwC US Tax LLP was retained as tax services provider by an order entered the same day, alongside interim compensation procedures governing monthly fee statements and interim fee applications for retained professionals.

Committee professionals. The Official Committee of Unsecured Creditors filed retention applications on June 24, 2026 for Kelley Drye & Warren LLP as lead counsel, Ice Miller LLP as Delaware counsel, and Province, LLC as financial advisor.

Lender counsel. Eclipse Business Capital, the ABL and FILO Agent, is represented by Riemer & Braunstein LLP (Steven Fox and Janine M. Figueiredo) with Ashby & Geddes as Delaware counsel. The Ad Hoc Group of Consenting Term Loan Lenders is represented by Milbank LLP (Matthew L. Brod and Benjamin M. Schak) with Richards, Layton & Finger. Wilmington Savings Fund Society, FSB, the Term Loan Agent, is represented by ArentFox Schiff LLP (Jeffrey R. Gleit, Matthew R. Bentley, and Justin A. Kesselman) with Morris James LLP.

Bar dates. The Bar Date Motion resolved into a General Bar Date of July 13, 2026 at 11:59 p.m. Eastern Time, a Governmental Bar Date of November 13, 2026 at 11:59 p.m. Eastern Time, an Amended Schedules Bar Date running to the later of the applicable bar date or 21 days after notice of amendment, and a Rejection Damages Bar Date running to the later of the General Bar Date or 30 days after the rejection-effective date.

Frequently Asked Questions

When did West Marine file for chapter 11?

West Marine, Inc. and its affiliated debtors filed prenegotiated chapter 11 petitions on May 17, 2026 in the U.S. Bankruptcy Court for the District of Delaware. The lead case is 26-10794-KBO.

Is West Marine liquidating or reorganizing?

West Marine is reorganizing under a standalone Recapitalization Transaction. The RSA originally built in a toggle to a 363 sale, but the Debtors received no Qualified Bids by the June 26, 2026 bid deadline, cancelled the scheduled auction, and elected to proceed solely with the Recapitalization. Term Loan holders receive 100% of the New Equity Interests in Reorganized West Marine, and the company is slated to emerge with a $7.5 million exit facility. The Combined Confirmation Hearing is scheduled for August 11, 2026.

Did West Marine obtain DIP financing?

No. The Debtors filed without a DIP facility and are operating on consensual use of cash collateral, supported by approximately $21.5 million of petition cash and a 13-week budget averaging approximately $12.5 million in weekly disbursements. The first monthly operating report showed cash growing to $36.4 million by May 31, 2026, with any balance above $20.0 million swept weekly to the Prepetition ABL Agent.

What do general unsecured creditors recover?

General Unsecured Claims (Class 6) are subject to a death-trap. The amended Disclosure Statement estimates Class 6 claims at $99.3 million to $109.2 million, projecting a 0.2%–0.3% recovery if the class votes to accept the plan and shares pro rata in $250,000 of GUC Cash. If Class 6 rejects, GUC claims are cancelled with no distribution.

Who is the claims agent for West Marine?

Kurtzman Carson Consultants, LLC dba Verita Global serves as claims and noticing agent and was later also retained as administrative advisor. The General Claims Bar Date is July 13, 2026, and the Governmental Bar Date is November 13, 2026.

What is the creditors' committee investigating?

The seven-member committee, appointed May 29, 2026, filed a Rule 2004 motion on June 26, 2026 seeking documents related to West Marine's 2017 leveraged buyout, 2021 L Catterton acquisition, and 2023 out-of-court recapitalizations, and to test the Plan's proposed releases of the Debtors' prepetition sponsors and lenders. The Debtors objected on July 1, 2026, and the dispute remained pending as a status-conference matter heading into the August 11 confirmation hearing.

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Oaktree's other 2026 restructuring, SiO2 Medical Products' equitization, also saw a sale process give way to a lender-controlled recapitalization. Tommy's Boats and Car Toys show how specialty retailers handle store-level wind-downs in chapter 11, and Liberated Brands illustrates a similarly lease-driven retail collapse.

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