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October 7, 2019 – Further to an October 3rd auction and to an October 7th sale hearing, the Court approved the $16.5mn sale of the Debtors' E-Commerce Business assets City Chic Collective USA Incorporated (“City Chic”) [Docket No. 339]. The revised asset purchase agreement amongst the Debtors and City Chic is attached to the sale order as Exhibit A.
As previously reported, the $16.5mn winning bid was a considerable advancement on City Chic's opening stalking horse bid of $10.0mn; what was not clear until now were the exact terms of the bid and exactly how much the Debtors' had benefited from the lively October 3rd auction.
The Debtor's original asset purchase agreement had a cash price of $10.0mn, subject to adjustment as noted below:
"The aggregate purchase price for the Purchased Assets is $10,000,000 (the ‘Base Amount’), plus the Inventory Surplus, minus the Inventory Deficit, plus the assumption of Assumed Liabilities (collectively, the ‘Purchase Price’). At the Closing, Buyer shall (i) pay to the Sellers Representative an amount equal to the Base Amount, plus the Estimated Inventory Surplus, minus the Estimated Inventory Deficit, as set forth on the Estimated Inventory Statement delivered by Sellers Representative, minus the Deposit, with interest, and (ii) direct the Escrow Holder to disburse the Deposit to Sellers (collectively, the ‘Estimated Purchase Price’)."
The revised October 3rd version of the asset purchase agreement, leaved the adjustments largely unchanged but now provides:
"The aggregate purchase price for the Purchased Assets is an amount equal to the Cash Payment, plus the Inventory Surplus, minus the Inventory Deficit, plus the assumption of Assumed Liabilities (collectively, the ‘Purchase Price’)," where the Cash Payment is $17.2mn less the "FB Flurry Accounts Payable" which equal almost $715k.
About the Debtors
Avenue is a national specialty fashion retailer of women’s plus-sized apparel, intimates, footwear, and accessories that is dedicated to providing real-sized women with modern and fashionable clothes at affordable prices. Avenue’s product line almost exclusively features a marketplace sourced and procured assortment of branded merchandise. Headquartered in Rochelle Park, New Jersey, the Debtors have two primary units: the retail store business and an e-commerce business. Through their retail business, the Debtors operate 255 leased stores in 35 states, which are primarily located in suburban areas and in malls or shopping centers. In addition to their retail operations, the Debtors sell and distribute merchandise through the Avenue.com and Loralette.com websites (the ‘E-Commerce Business’).
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