Gordmans Stores could find its way out of bankruptcy and back into the founding family, as former owner and chief executive officer Jeff Gordman is looking to make an offer for the struggling department store chain.
Gordman on Monday told a Nebraska bankruptcy court that he plans to submit a “competitive qualified bid” through his company Jeff Gordman Advisory LLC in partnership with a liquidation firm. Although Gordman plans to “dispose” certain aspects of the bankrupt retailer’s assets, he also said, should his firm be the winning bidder, “vendors would continue to have an entity with whom to transact on a go forward basis.”
Gordman is the great-grandson of Sam Richman, who founded Gordmans predecessor company in 1915. He became ceo in 1996, when the retailer was in the midst of implementing a bankruptcy reorganization approved in 1993. Gordman left the company in 2014, after it had been sold to Sun Capital Partners and became a publicly traded company.
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Gordman’s laid out his planned bid while objecting to the retailer’s proposed bidding procedures, which include a provision for a $10 million payment to stalking horse bidder — a joint venture of Tiger Capital Group and Great American Group — to cover any “noncancellable” merchandise orders and a break-up fee of $1.13 million.
JGA said these provisions are a “major impediment” to its interest in bidding on Gordmans approximately $74 million in assets and added that if they are finalized by the bankruptcy court, it may not place its bid.
“JGA does not want inventory identified, purchased and scheduled for delivery by a liquidator for sole the purpose of liquidating the assets of the debtors in the quickest fashion,” the firm said in its objection. “Indeed, the process of ‘merchandising’ any retail chain is critical to its success. As a potential successful bidder and future owner of many of the assets of the debtors, JGA will want to select and purchase its own merchandise.”
In addition to putting JGA off its planned bid for Gordmans, Gordman said such bidding procedures would “substantially chill, if not eliminate” other potential competitive bids as well.
Another entity that has expressed interest in the Gordmans auction is Stage Stores Inc., even though the specialty department store chain dealing with its own financial ups and downs in recent months.
Under the current bidding procedures, Gordmans is to receive any qualified bids by March 27, hold an auction March 28 and announce a winner by March 30.
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