A possible deal for Linens 'n Things has evaporated. Now the company may face liquidation, possibly not even surviving the holiday shopping season.
Cerberus Capital Management last week abandoned a prospective plan to buy the struggling home-furnishings chain, which filed Chapter 11 in May after being taken private for $1.3 billion in 2005 by billionaire Leon Black's Apollo Capital Management, sources said.
In turn, Linens 'n Things may take liquidation bids as soon as mid-October, paving the way for chainwide going-out-of-business clearances in November and December, sources said.
For six weeks, buyout giant Cerberus had been weighing a plan to scoop up the chain at a rock-bottom price, downsize it and return it to profitability, sources said.