Peekay Boutiques filed with the U.S. Bankruptcy Court a motion for an order approving bid procedures in connection with the solicitation and acceptance of higher and better bids, as set forth in the asset purchase agreement by and among the Debtors and TLA Acquisition, relating to the sale of substantially all of the Debtors’ assets, scheduling a hearing to consider the sale, approving the asset purchase agreement and authorizing the sale of certain assets of the Debtors outside the ordinary course of business, and authorizing the sale of assets free and clear of all liens claims, encumbrances and interests.
The motion explains, “Although the Debtors have been marketing their assets for more than 17 months, the proposed Bid Procedures contemplate a marketing process in the Chapter 11 Cases and a bid deadline of October 18, 2017 (the ‘Bid Deadline’)….These marketing efforts will be sufficient to ensure the highest and best offer, particularly in light of the Debtors’ limited financing options, ongoing cash needs and extensive, multi-year prepetition marketing effort…In particular, the Bid Procedures set forth a ‘Credit Bid Cap’…which caps the amount of debt that the Stalking Horse Bidder can credit bid for the Debtors’ assets. As a result, potential bidders will know, at the very outset of the Chapter 11 Cases, the price point at which the Stalking Horse Bidder and Term A Lenders are prepared to walk away from the assets.”
The motion continues, “In consideration for the Acquired Assets, Buyer shall assume the Assumed Liabilities by executing the Assumption Agreement and Buyer shall credit bid an aggregate amount equal to the Term Loan A Claims held by Buyer in an amount equal to $30 million, such Purchase Price to be paid by Credit Bid pursuant to a dollar-for-dollar reduction of the Term Loan A Claims held by Buyer.”
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