Dive Brief:

• Sports Authority and its consignment suppliers have settled their differences, closing the books on more than 160 lawsuits that threatened to make things even worse for the embattled sporting goods retailer, which filed for bankruptcy protection last month. 

• At issue is some $85 million worth of winter gear and other goods being sold at Sports Authority stores—items suppliers wanted returned because they feared not getting paid.

• Sports Authority sued the vendors last month to keep the goods on its shelves, saying that selling the products would hurt its operations as it struggles to regroup.

Dive Insight:

Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, DE, had urged Sports Authority to settle its differences with its vendors and is considering the agreement Tuesday. She’ll also be taking up another contentious issue: Whether Sports Authority can use the remainder of a $595 million bankruptcy loan, which the retailer wants to use to continue operations. The company was approved to use up to $275 million of the loan, but creditors contend that tapping the remaining funds is unnecessary and to the benefit of lenders including Bank of America, Wells Fargo & Co., J.P. Morgan Chase & Co. and TPG, who stand to gain from the $22.3 million in attached fees and interest.

Sports Authority will likely emerge from bankruptcy court as a takeover target. Dick’s Sporting Goods is said to be in talks to buy some of its stores and assets. Sports Authority has until the end of this month to find a buyer, according to the bankruptcy court deadlines.

Sports Authority is at least $643 million in debt, according to reports. Details of Sports Authority's struggles emerged earlier this year, when Bloomberg said that the retailer was in talks with bondholders. News of missing payments to suppliers and a failure to pay a $20 million interest payment soon followed, as well as store closings and employee layoffs. 

In a statement from CEO Michael Foss announcing Sports Authority's bankruptcy, the retailer said it will close or sell around 140 stores and two distribution centers in the coming months as part of the process. Foss told the Denver Post that the company also plans to let go around 3,400 of its 15,000 employees. 

Experts say Sports Authority's immense debt exacerbated its failures to weather market fluctuations and to compete online with the likes of Amazon and with even general merchandisers like Target. 

“Amazon Prime makes it more accessible to shop with them,” Reshmi Basu, associate editor at Debtwire, an intelligence service that researches and reports on corporate debt situations, told Retail Dive last month. “The way I look at retail is that the number two brick-and-mortar player isn’t big enough for the market to absorb. For example, Linens 'n Things market share went to Bed Bath & Beyond. The number two player has kind of fallen off lately. The market can’t absorb it.”