In a dramatic courtroom climax, Texas-based department store Conn’s secured confirmation of its Chapter 11 liquidation plan on Monday, bringing closure to a volatile bankruptcy saga that saw the once-prominent retailer buckle under $1.95 billion in debt.
U.S. Bankruptcy Judge Alfredo R. Perez approved the plan, brushing aside objections from the U.S. Trustee’s Office, which had warned the plan’s third-party release and exculpation provisions could violate recent Supreme Court precedent.
“This plan, especially with the very narrow focus of the releases, meets the definition of a consensual third-party release,” Judge Perez declared from the bench.
The Fall of a Retail Pillar
Conn’s filed for Chapter 11 in July 2024, citing the triple blow of shifting consumer behavior, surging interest rates, and post-merger costs. In a bid to salvage value, the company chose not to restructure but to liquidate entirely — a stark departure from typical retail bankruptcies.
By November 2024, every Conn’s store had shuttered its doors. The liquidation included a sweeping sale of real estate, inventory, intellectual property, and even its consumer loan portfolio and loan servicing platforms.
At the center of the plan was the $360 million sale of most assets to debt collection firm Jefferson Capital Systems, approved by the court in late 2024.
