The company on Friday selected a bid by Hilco Merchant Resources and Gordon Brothers Retail Partners as the baseline for the court auction. The dollar amount of the bid was not disclosed.
Liquidators have been circling around the bankruptcy case, mostly because second-lien bondholders have been pushing for the liquidation since the retailer filed its voluntary Chapter 11 petition in February for bankruptcy court protection. The bondholders are believed to be working with Tiger Capital Group and the Great American Group.
Ana Lucia Hurtado, a distressed debt legal analyst at Reorg Research, said Monday there were three liquidation bids heading into the auction. She noted that had any other bidder been interested in making a going-concern offer for the company, it would have had to file paperwork seeking court permission since the bid deadline had passed. Court records at midday Monday indicated that no such request had been made by anyone.
The Bon-Ton Stores Inc. had been working with a consortium of two landlords and one hedge fund last week to keep the company in operation, but they were never able to finalize an agreement even though they had submitted a letter of intent to acquire most of the company’s assets.
Concerns that the bankruptcy case would turn into a liquidation grew on Wednesday after Delaware Bankruptcy Court Judge Mary Walrath denied a request from the investor group for a $500,000 “work fee” so the parties could continue discussions as they tried to finalize a so-called “stalking-horse” agreement.