Aeropostale Inc (AROPQ.PK) has been negotiating a potential sale to private equity firm Versa Capital Management LLC that would save thousands of jobs at the bankrupt U.S. teen retail chain and keep many of its stores open, according to a court filing.

Versa, which specializes in distressed investments, would pay an undisclosed amount of cash for Aeropostale’s inventory and take on over 500 of the chain’s leases, located mostly in malls across the United States, according to the filing made late on Thursday.

Versa’s offer would be a potential stalking horse bid in a bankruptcy auction for the retailer scheduled for later this month, setting the minimum price for other potential buyers. Other bids are due Aug. 18.

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