Former Boscov’s gets court nod on recovery plan

WILMINGTON - Thirteen months after Boscov's Department Stores declared Chapter 11 bankruptcy, a judge today approved payment of all remaining debts so that the Reading-based retailer could emerge from federal court supervision within three days.

The ruling by U.S. Bankruptcy Judge Kevin Gross does not affect the operations of the 39-store chain, whose stores are a mainstay at shopping malls across the Philadelphia region and in neighboring states. The business, which employees 7,500 people in several states, was rescued in December and began operating as a new company when Albert Boscov, 79, returned from retirement and assembled a $300 million bid to buy his family's chain at bankruptcy auction.

Engineered during an oppressive recession, when even healthy businesses were having difficulty lining up loans and cash, Boscov's asset purchase was considered an extraordinary rescue that few thought possible, especially since larger retailers were falling into bankruptcy and not recovering.

Today's order by Gross authorized payment of all remaining debts within three days. After the checks have been issued, the shell corporation that owed vendors and other unsecured creditors about $90 million when it declared bankruptcy in August 2008 will cease to exist, leaving only the new company Al Boscov has been running since December, said Scott Esterbrook of Reed Smith L.L.P., who represented Boscov as the buyer.