The losing bidders for Filene’s Basement aren’t going away quietly.
In an unusual turn of events, both Crown Acquisitions and Syms Corp. filed objections to the bankruptcy auction sale of Filene’s Basement in which an affiliate of The Men’s Wearhouse Inc. was deemed the winning bidder at $67 million.
Their grievances will be considered during a hearing on the sale set for today in a Delaware bankruptcy court.
In court papers filed with the court Tuesday, Crown called the auction a “travesty.” It had been expected to file an objection since the conclusion of the auction late Friday, claiming it refused to bid because the debtor wasn’t adhering to court-approved bid procedures.
Crown complained Men’s Wearhouse failed to submit an offer by the bid deadline, as required, because the retailer intended to buy the assets pursuant to a plan of reorganization.
Crown also claimed Syms doesn’t have the financial wherewithal to close on a deal for the bankrupt off-pricer, and that its partner in the bidding process, Vornado Realty Trust, is in “default for millions of dollars of obligations owed to the debtors.” Vornado is the landlord of the troubled Downtown Crossing development in downtown Boston, where Filene’s Basement planned to open a store. It’s been paying Filene’s $500,000 a month since January as compensation for not delivering the store on schedule.
The winning $67 million bid by Men’s Wearhouse affiliate K&G Acquisition Corp. includes about $5 million associated with potential litigation revolving around Filene’s lease at the currently inactive Downtown Crossing project. After bidding $22 million for Filene’s last month, Crown was designated the stalking horse for the off-pricer.
Syms said in its filing Tuesday that certain bid procedures, including the requirement of a commitment to close promptly after the date of the sale, were not followed. It pointed out the Men’s Wearhouse bid has a proposed effective date of Sept. 26. Syms said that at a certain point of the auction, its bid was deemed the highest and best bid, and that it continued bidding even though procedures were not adhered to because it “risked being illegally excluded by the [unsecured creditors’] committee and the debtors from the auction if it did not bid.”
In a court document, Marcy Syms, president and chief executive officer of the off-price retail group that bears her family name, said, “The cavalier attitude towards contractual obligations and the meaning of a court order taken by the estate professionals in this case is extremely disconcerting to an outsider participating in the bankruptcy system. The inability to rely on the rules established by this court will leave me, and I suspect others, less willing to invest the time, resources and money in a similar endeavor in the future.”
Bob Carbonell, executive vice president and chief credit officer at Bernard Sands Credit Consultants, said, “In my 40 years in credit, I have never seen such a vociferous objection to a Chapter 11 bid. It must have been a heck of [an auction and the hearing to approve the sale] should be worth selling tickets to.”
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)