A federal bankruptcy judge in Man-hattan said Tuesday that he was prepared to approve the sale of Fortunoff Holdings LLC to seven companies that would liquidate its stores and inventory.
This story first appeared in the February 14, 2009 issue of WWD. Subscribe Today.
Final approval by Judge Robert Drain is expected at a hearing this morning set for 9 a.m. Two outstanding issues to be resolved today are the finalization of a service agreement and the judge’s need to resolve questions about jewelry held by the retailer on a consignment basis.
The deal emerged during an auction Monday in which the companies outbid stalking horse bidder Gordon Brothers Retail Partners and Hilco Merchant Resources with an offer of roughly $82 million.
The seven firms are Tiger Capital Group LLC, SB Capital Group LLC, Kimco Realty Services, Great American Group WF LLC, Hudson Capital Partners LLC, The Gordon Co. Inc. (unrelated to Gordon Brothers) and Bobby Wilkerson Inc. The latter two are jewelers that will deal with Fortunoff’s jewelry inventory.
The stalking horse bid amounts to 80 percent of the guaranteed value of the assets, while the winning bid equaled 88.8 percent of that amount.
The group led by Tiger Capital last week had attempted to make a stalking horse bid of its own of about 77 percent of the total value of the assets.
Lawyers for Fortunoff argued that it was necessary to effect a transaction immediately to have going-out-of-business sales ready to start as the Mother’s Day selling season began.
Fortunoff filed for Chapter 11 bankruptcy court protection on Feb. 5. It was its second filing in as many years. The retailer filed early in 2008, and was brought out of bankruptcy when it was acquired by NRDC Equity Partners.