Aeropostale, a teen-focused clothing retailer, filed for bankruptcy earlier this year, and since then its continuing existence has been in question. Its business assets are up for auction this week, and the retailer reports that a bid has come in that would keep the doors open and the jeans flowing onto store shelves.

The bidder would be a joint venture between two real estate trusts that are prominent mall owners: Simon Property Group and General Growth Properties. The venture would keep the retail chain in business as a “going concern,” with at least 229 stores and perhaps more surviving the change in ownership.

Sycamore Partners, the lender that Aeropostale accuses of using its control over one of the chain’s suppliers to cut off credit lines and push it into bankruptcy, is eligible to use Aeropostale’s debt against it to bid in the bankruptcy auction. The company fought this in court, but the judge ruled that Sycamore should be allowed to bid, and that Aeropostale has to accept the highest bid.

You may recall that a similar post-bankruptcy deal is why there are still RadioShacks around: lender Standard General bid using RadioShack’s debt as currency over the objections of other creditors, keeping less than half of the chain’s stores open.

If the going-concern deal falls through, the ever-present liquidators Hilco and Gordon Brothers, along with Authentic Brands Group, would buy the inventory and fixtures, holding liquidation sales in the traditional manner.

At the time it filed for bankruptcy, Aeropostale had about 800 stores in North America.

Aeropostale Gets Going Concern Bid to Keep 229 Stores Open [Bloomberg]

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