Now that The Gores Group has taken a 51% interest in Stock Building Supply, Stock's revival plan depends in large part on whether it can get out from lease payments it is making on scores of facilities that it has closed or planned to close since 2006.
Indeed, in the fiscal year ended July 31, 2008, $430 million of the $744 million in operating losses that Stock incurred were for restructuring and impairment provisions. Stock's Chapter 11 filings note that the Gores Group's investment in Stock on May 5 was contingent on Stock filing for protection from creditors, largely to win the U.S. Bankruptcy Court's approval to cancel the leases on the closed locations.
Stock asked the court to reject at least 210 leases. Filings made to the court reveal more than 150 agreements with various counterparties for leases that extend as far into the future as 2021. In Wilmington, Del., U.S. Bankruptcy Judge Mary F. Walrath has scheduled a hearing at 10:30 a.m. ET May 28 to consider rejecting those leases.