By  on July 29, 2009

London-based Emerisque Brands’ planned acquisition of bankrupt Hartmarx Corp. has been put in jeopardy over certain professional fees in the case, according to sources close to the bankruptcy.

Sources said Emerisque and its partner, SKNL North America, were set to close the deal a few days ago and that funds had already begun being transferred to accounts over the weekend in anticipation of the close. Then the parties hit a snag when some professionals in the Hartmarx bankruptcy sought to have the purchaser guarantee their fees as they wind down operations.

Emerisque could not be reached for comment Tuesday.

Fees generated in the bankruptcy are considered post-petition claims and are paid by the debtor. Purchasers of assets typically don’t pay wind-down costs, which are generally left as claims that are part of the debtor’s estate.

It could not be ascertained which professionals were seeking the guarantees, although FTI Consulting is still working on the case as restructuring adviser, as is Hartmarx’s legal adviser, Skadden, Arps, Slate, Meagher & Flom. Neither officials at FTI nor Skadden Arps could be reached for comment.

Also unavailable were representatives at Neal, Gerber & Eisenberg, counsel for the unsecured creditors. One source said the unsecured creditors’ committee was not in support of the fee guarantee request.

Fees for all professionals in the Hartmarx bankruptcy, from the January filing, total nearly $20 million, sources said. The Chicago bankruptcy court in July approved a request from Skadden Arps for $1.3 million in fees plus $14,857 in expenses. Moelis & Co., Hartmarx’s investment banker, received court approval earlier this month for fees of $448,387 and expenses of $135,101.

The professionals could likely garner more fees if the deal doesn’t go through and there is a liquidation of the estate instead. However, that would also mean jobs at the factories the unions fought hard to keep would end up being eliminated.

And some think Emerisque, which walked away from the deal once before and sweetened its offer when it came back to the table at the request of Hartmarx, could be persuaded to up the ante once again.

Sources close to the bankruptcy said that’s not likely to happen, although one source said the private equity firm might be eyeing possible legal options through the bankruptcy court.

Financial sources said the transaction, which was expected to close July 7, was delayed due to negotiations among the parties over which entities would participate in the syndicate that is financing the deal. In addition, some of the talks were delayed when the financial community had to deal with an immediate crisis over the potential bankruptcy of financial services firm CIT Corp., which has been averted, at least for now. That happened earlier this month as some of the syndicate participants received numerous calls from potential new clients seeking alternative lending options.

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