Most Recent Articles In Legal
Latest Legal Articles
- Bulgari to Stand in Tax Trial This Fall
- Valentino Sale Decision Key Issue in Marzotto Trial
- American Apparel Seeks Restraining Order Against Charney
More Articles By
Still no word. The future owner of HMX Group is up in the air as there was no report by the end of the business day Monday as to the result of the bankruptcy court auction.
Meanwhile, HMX’s chief executive officer, Doug Williams, filed court documents in response to an objection filed on Friday on behalf of the unsecured creditors committee to HMX’s request for court approval for the sale of the company. Williams said in a response document that while HMX bore the burden of proof on the sale motion, he felt “constrained to respond” because a number of the statements were directed squarely on him.
Williams also filed a declaration with the court, essentially stating the same information in both filings.
Williams disputed the committee’s charge that the auction process was not conducted on an even playing field. He told the court that the process was designed to offer flexibility to potential bidders, either 1) a bid for all or a portion of the assets, or 2) a bid as a “going concern” or liquidation for the assets.
He also noted that he was told by an independent director and the financial adviser handling the sale process that one prospective bidder, not Authentic Brands Group that later became the stalking-horse bidder, had suggested the idea of splitting up the intellectual property assets from the operating division and then licensing the trademarks to the operator.
WWD first reported in September that Iconix Brand Group was seriously interested in HMX. As a brand management firm, it would have needed an operator to run the business and was believed to have been looking for such an entity, according to sources at the time.
Williams said when formulating a structure for the stalking-horse bid, he required that Authentic agree for him to continue discussions with other prospective bidders.
In the declaration, Williams said he specifically rejected an offer from one bidder that required him to negotiate only with that party and no one else.
As for some of the other objections stated, such as his refusal to provide financials, Williams acknowledged that he did decline to do so as the requested information was connected to the post-sale business plan and other strategies for the post-closing operating unit.
The ceo emphasized the information was “proprietary and confidential in nature” and had no “bearing on the committee’s fiduciary duty to maximize asset value for the benefit of the estates’ creditors.” Williams said he was also concerned with the possibility of that information being used for “competitive advantage in future dealings with the post-closing operating entity.”
Williams also noted that Salus Capital Partners, which is providing financing to the operating division and was also cited in the objection, had “agreed, in principle, to discuss financing” for a similarly structured transaction involving a licensor other than Authentic Brands, “subject to considerations regarding the creditworthiness of the alternative” entity.