NEW YORK -- The Gitano Group, which has put itself on the block, plans to complete a sale while it is in bankruptcy proceedings, according to its management consultant.
In a letter sent to potential bidders by Kurt Salmon Associates, Gitano's advisor, it is stated that the troubled manufacturer intends to decide the winning bid by Friday and then "immediately" file a voluntary Chapter 11 petition.
A Gitano spokesman declined comment on the letter.
The letter said the rapid pace of the deal is intended to allow the purchaser time to book holiday and spring 1995 orders. It gives no purchase price target.
In addition to Gitano's operations and trademarks, the assets consist of about $13.8 million of basic jeans inventory; $10.4 million of accounts receivable, and certain equipment, according to the letter.
The Regatta trademarks are not included in the sale, the letter noted.
The deadline to submit bids for Gitano expired Tuesday, and it could not immediately be learned how many interested parties there are. Gitano has previously stated that it did not believe the sale would be enough to settle the more than $130 million owed to its secured creditors.
As reported, Gitano put itself up for sale after Wal-Mart Stores -- its largest customer -- stopped buying from the company following its admission of federal customs law violations. However, the letter said that Wal-Mart would continue to buy the Gitano label if it was purchased by "an experienced apparel manufacturer."
"Senior officials at Wal-Mart have separately assured both Gitano and Kurt Salmon Associates that Wal-Mart is committed to the Gitano label and that Wal-Mart wants to continue to do business with Gitano under new ownership," the letter said.
Wal-Mart officials could not be reached for comment.
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