Bankrupt teen retailer Aéropostale Inc. is seeking court approval of $500,000 as an expense reimbursement to get a stalking horse agreement done and spur a court auction for its U.S. assets.

The retailer is in talks with Versa Capital Management regarding a so-called “stalking horse” bid. The court document said an agreement needs to be finalized by Aug. 11. A stalking horse bid typically sets the base price for any subsequent court auction that could take place. The disclosure regarding a possible sale of the company came in a filing with the Manhattan bankruptcy court late last week seeking approval for expense reimbursement in connection with the auction and sale of the retailer’s U.S. operations.

While the agreement with Versa is not yet finalized and negotiations are still ongoing, the document said a transaction contemplates a “cash payment for debtors’ inventory, assumption of over 500 existing and modified unexpired store leases and continued employment for thousands of store-level and corporate employees.” The court document also emphasized that a “going concern operation is critical to maximizing the value of the debtors’ international business, which requires support from the U.S. operations in areas such as buying, G&A and sourcing to realize the business’ full value.”

The legal document also said the company has been advised that “Versa is unwilling to move forward with further diligence and negotiations without payment of the expense reimbursement.” The debtor said in consultation with its advisers that the request is “reasonable and justified under the circumstances.” The circumstances Aéropostale is referring to involves the compressed timeline for the bid, as well as the uncertainty of whether Sycamore affiliates would be able to credit bid.

The request for $500,000 in expense reimbursements calls for an initial payment to Versa of $200,000, and for the establishment of a segregated account for Versa’s benefit for the amount of $300,000.

The bankruptcy court is expected to rule on the motion this week.

A spokesman for Sycamore on Monday said, “Sycamore welcomes the interest of all potential bidders for Aéropostale’s business, and looks forward to Aéropostale conducting a fair and robust auction for its assets. Sycamore has consistently maintained that it wants nothing more than to be repaid the amounts it is owned by Aérospostale.”