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Sports Authority could benefit from Chapter 11 protection

An insider claims the company recently skipped an interest payment and is discussing possible other options with bondholders. This step puts Sports Authority into a 30-day grace period. If the payment is not made within that period, a default will be triggered.

The company was bought back in 2006 by a private equity firm for $1.3 billion. It reportedly has more than 450 stores but is still dragging behind competitors such as Dick's Sporting Goods Inc., Amazon.com and Lululemon Athletica Inc.

Although the company is trying to avoid filing for bankruptcy, if it continues to struggle to make payments to its creditors, it may be wise for the company to seek the protection of a bankruptcy court. While filing for Chapter 11 bankruptcy may have negative connotations, it can actually be a positive step for a company that wants to reinvent itself and grow in the future. This type of protection gives the company time to rethink the way it runs its business in order to pay off debtors and grow its profits.

An insider claims the company recently skipped an interest payment and is discussing possible other options with bondholders. This step puts Sports Authority into a 30-day grace period. If the payment is not made within that period, a default will be triggered.

The company was bought back in 2006 by a private equity firm for $1.3 billion. It reportedly has more than 450 stores but is still dragging behind competitors such as Dick's Sporting Goods Inc., Amazon.com and Lululemon Athletica Inc.

Although the company is trying to avoid filing for bankruptcy, if it continues to struggle to make payments to its creditors, it may be wise for the company to seek the protection of a bankruptcy court. While filing for Chapter 11 bankruptcy may have negative connotations, it can actually be a positive step for a company that wants to reinvent itself and grow in the future. This type of protection gives the company time to rethink the way it runs its business in order to pay off debtors and grow its profits.

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