A Chicago bankruptcy court judge late Thursday approved the sale of the assets of bankrupt Hartmarx Corp. to London-based firm Emerisque Brands and its investment partner SKNL.
Full details could not be determined at press time, but it was learned there is likely some adjustment to the purchase price based on changes in the valuation of some assets, such as the amount of cash that Hartmarx has on hand.
Emerisque and SKNL last month were named the stalking horse bidder with an offer of $128.4 million, which included $33.5 million in liabilities. That total is higher than the initial offer of $85.5 million. The deal is expected to close in about two weeks.
Hartmarx owes its lending group, led by Wells Fargo, more than $120 million.
The approval ends an agonizing five-month process that began with Hartmarx’s filing for Chapter 11 bankruptcy protection on Jan. 23, just three days after the inauguration of President Obama, who was outfitted by the Chicago-based firm during the campaign and many of his inaugural festivities.
Despite expressions of interest in all of the company or parts of it, speculation began to grow in late April that Wells Fargo Capital Finance, one of the debtor-in-possession lenders, wouldn’t fund ongoing operations and might force a liquidation. Several members of Congress joined with union representatives to pressure Wells Fargo, a recipient of Troubled Assets Relief Program funds, to support the company, allow a sale and protect the U.S. jobs that Hartmarx’s domestic production provides.
While Mistral Equity Partners and Yucaipa Cos. were interested in bidding for parts of Hartmarx, Emerisque’s bid was said to be the only offer involving no contingencies and providing for the firm’s retention in one piece. After making what it termed a third and “final” offer, Emerisque, along with SKNL North America BV, was designated as the stalking horse bidder on May 22.