Bankrupt Hartmarx Corp. is expected to name its so-called stalking horse bid in the next few weeks, and the favored scenario is a combination of the best of offers from Mistral Equity Partners and Yucaipa Cos.

This story first appeared in the May 11, 2009 issue of WWD. Subscribe Today.

Although talks are ongoing and bankruptcy court approval still is needed, the women’s brands under the Hartmarx umbrella are expected to go to New York-based Mistral, while the men’s brands would head to the portfolio of Los Angeles-based Yucaipa.

Executives at Mistral and Yucaipa could not be reached for comment over the weekend. Executives at Hartmarx declined comment.

Financial sources said the plan was cobbled together by bankers after the bid from London-based Emerisque expired on Wednesday. The British firm reportedly tired of the negotiations in which it was being played both ends against the middle, but without the benefit of the break-up fee it would have been in line for had it actually been named the stalking horse.

The stalking horse was expected to be named on April 24, and then again the day before Emerisque’s bid expired last week. The delays have come as Hartmarx’s lenders, led by Wells Fargo/Wachovia, were reported to be exerting more pressure over the course of the bankruptcy, even going as far as pushing for a liquidation. Lawmakers on Capitol Hill have intervened to prevent Wells Fargo/Wachovia, which received Troubled Assets Relief Program funds, from interfering with a sale.

The banks’ priority is to ensure it gets repaid on its loan. While a liquidation and resulting loss of jobs would damage the local economies, they’re being weighed against questions about the power and viability of the Hartmarx brands. While the company at the time it filed Chapter 11 was hoping to sell itself for over $120 million, sources said the company’s tangible net worth now is likely less than $75 million.

Exclusively Misook, Christopher Blue and Monarchy are niche women’s brands acquired in recent years by Hartmarx and believed to be profitable.

Yucaipa is said to be only interested in the men’s brands, particularly Hickey Freeman and Hart Schaffner Marx. Each of the brands does about $100 million in volume. Yucaipa, according to sources, is eyeing a retail distribution that would involve selling the men’s tailored brands exclusively to a specialty retailer, such as Men’s Wearhouse. Yucaipa also is believed to be interested in keeping golf brand Bobby Jones, which does about $16 million annually.

Once terms are successfully negotiated, a bankruptcy court auction could change who gets what.

Spencer Hays’ Individualized Apparel Group is believed to be preparing a bid for Hickey Freeman and Hart Schaffner Marx, according to bankers. Sources also said they expect a bid from an investor group led by designer Joseph Abboud. Golf company Greg Norman Collection, led by men’s wear veteran Mike Setola, is believed to be interested in Bobby Jones. Emerisque could also jump back in with a new offer.