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March 1, 2019 − Further to the terms of a bidding procedures order dated February 21, 2019 [Docket No. 150], the Debtors notified the Court that they (i) had not received any bids other than the $17.5mn stalking horse bid submitted by Enesco Properties, LLC ("Enesco") prior to the bid deadline, (ii) that had cancelled the auction scheduled for March 4, 2019 and (iii) had designated Enesco as the Successful Bidder [Docket No. 227].
As previously reported in respect of Enesco's stalking horse bid [Docket No. 23], “The stalking horse bid is for $17.5 million in cash, subject to post-closing adjustments, and includes a $3 million earnest money deposit. The stalking horse bid averted what the Debtors had until then believed was their best and only option to maximize value to their creditors: liquidate the physical stores and sell the direct-sales business to the highest bidder… the Stalking Horse Bidder proposes to purchase the Debtors' direct-sales business, a significant number of U.S. stores, and related assets (as further described in the Stalking Horse APA, the ‘Acquired Assets’) for cash consideration of approximately $17.5 million, subject to certain adjustments (the ‘Purchase Price’)…the Stalking Horse APA contemplates Bid Protections in the form of a breakup fee of $425,000 (equal to 2.4% of the Purchase Price) (the ‘Breakup Fee’) and a provision for reimbursement of reasonable and documented fees and expenses not to exceed $350,000 (the ‘Expense Reimbursement’), in each case, in the event the Debtors consummate an alternative transaction. The Bid Protections were a necessary component of the Stalking Horse Bid, and the Debtors do not believe that the Stalking Horse Bidder would have submitted a proposal, let alone permitted such proposal to be subject to superior offers post-petition, without the Bid Protections. Accordingly, the Debtors believe that the benefit of the Stalking Horse APA outweighs the cost associated with the Bid Protections.”
The Court scheduled a continuation of the sale hearing for March 6, 2019.
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