Pedestrians walk past a branch of the lingerie shop, Agent Provocateur in central London, Britain, 03 March 2017. British media report Agent Provocateur, which has 10 stores in the UK and employs 600 people has been bought by a firm linked to British businessman, Mike Ashley, the owner of Sports Direct.Agent Provocateur in London, United Kingdom - 03 Mar 2017

Agent Provocateur is nearing the end of its bankruptcy in the U.S. with court approval of a $1.1 million asset sale to its recently sold U.K. parent operation.

A New York bankruptcy court on Wednesday signed off on the sale of Agent Provocateur Inc.’s intellectual property assets, along with any related inventory, stores and related liabilities to Agent Provocateur (US) LLC, a new affiliate created by Four Holdings, which recently bought the lingerie brand’s U.K.-based parent out of administration.

Four Holdings is a fashion showroom and marketing company, which counts billionaire Mike Ashley as a minority investor. Ashley, whose allegedly “victorian” treatment of workers at Sports Direct has been investigated, also owns a stake in French Connection through Sports Direct, and Four Holdings recently bought luxury men’s e-tailer Oki-ni.com.   

The Agent Provocateur deal includes $1.1 million in cash, less some outstanding debts and costs related to operations while in bankruptcy, but the American arm has a cash deficit of less than $2 million. While the buyer is set to take inventory and revenue from sales since May 8 as payment, there’s a possibility Agent Provocateur could still fall short, according to the sale agreement.

Representatives of Agent Provocateur could not be reached for comment on the sale.

Although the price is well below the at least $10 million of liabilities Agent Provocateur listed when it initially filed in April for bankruptcy protection, the company’s financial adviser said earlier this month that the deal should cover post-petition debts, including unpaid rent, and noted that the prospect of an offer from another part was “inconceivable.”

Before entering bankruptcy, Agent Provocateur operated 21 leased stores and eight licensed departments in certain Bloomingdale’s and Saks Fifth Avenue locations, but Four Holdings intends to keep 10 stores operational, along with a licensed department at Bloomingdale’s on 59th street in New York.

This is a better prospect than what the subsidiary had planned just a few months ago, when Chapter 7 liquidation was seen as the only option, according to a declaration by London-based global retail director Amanda Brooks.

As for what led to the apparently rapid deterioration of Agent Provocateur’s financial position over the last year, Brooks pointed to “certain accounting irregularities” discovered in August that showed the parent company was in dire need of “significant additional capital.”

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