Frederick’s of Hollywood is back in bankruptcy court and this time it has a buyer for its assets.

This story first appeared in the April 21, 2015 issue of WWD. Subscribe Today.

The retailer known for its racy lingerie filed on Sunday in Delaware for bankruptcy court protection, and has signed a deal with Authentic Brands Group for $22.5 million in cash plus an added amount per a revenue-sharing agreement for the purchase of the company’s intellectual property assets and its online business. The sale is subject to bankruptcy court approval, as well as better offers. The company’s stores have already been shuttered.

In a declaration by Michael A. O’Hara of Consensus Advisors, the company’s investment banker since December 2014, there were 24 confidentiality agreements signed and 21 parties were invited to submit strategic proposals. The banker said the debtor’s assets were marketed to a “broad group of strategic and financial buyers.” With ABG selected as the stalking horse, the company is asking the court to approve an $850,000 breakup fee in the event of a better offer. The current bidding schedule requires other bids to be submitted by May 26.

William Soncini, chief operating officer at Frederick’s, in his court statement said a “highly leveraged buyout” in 1997 left the company unable to service the debt, leading to the first tour of bankruptcy court in 2000. The company exited bankruptcy proceedings in January 2003, and merged with Movie Star Inc. in January 2008. Renamed Frederick’s of Hollywood Group Inc., the company was faced with growing liquidity issues and was taken private in May 2014 by an investment group led by Harbinger Group Inc. through a $24.8 million investment. He cited burdensome leases and a slowdown in mall traffic as some of the reasons for the liquidity issues, noting that the company’s last profitable year was in 2007.

The filing on Sunday shows that Salus Capital Partners will provide $11 million in debtor-in-possession financing.

In the petition, the Los Angeles-based Frederick’s listed $36.5 million in assets and $106 million in liabilities. Soncini said the debt obligations consist of $33 million in loans under a secured credit agreement, $16.2 million in unsecured promissory notes and $56.7 million in unsecured trade debt and liabilities to landlords. HGI Funding, an affiliated of Harbinger Group Inc., is alone owed $10.5 million in unsecured trade debt.

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