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November 5, 2020 – The Debtors filed a motion to extend the periods during which they have an exclusive right to file a Plan and solicit acceptances thereof, through and including February 3, 2021 and April 5, 2021, respectively [Docket No. 707]. Absent the requested relief, the exclusive Plan filing and solicitation periods are scheduled to expire on November 5, 2020 and January 4, 2020, respectively.
The extension motion anticipates the filing of a Plan in "the coming weeks" following progress on open issues with "the U.S. Trustee, their creditor constituencies and certain third parties." These discussion follow the headlining event of these Chapter 11 cases, the $325.0mn sale of substantailly all of the Debtors' assets to a consortium comprised of Authentic Brands Group ("ABG") and SPARC Group LLC ("SPARC," itself comprised of mall owner Simon Property Group and ABG). That sale closed on August 31, 2020.
The extension motion explains, “The Debtors have made significant and material progress in these chapter 11 cases while managing through the challenging COVID-19 pandemic. Since commencing these chapter 11 cases, among other things, the Debtors (i) stabilized their operations by securing $80 million of interest-free and fee-free post-petition financing, (ii) oversaw a value-maximizing marketing process that led to the sale of substantially all of their assets associated with the Brooks Brothers® business for $325 million with the consent of the official committee of unsecured creditors (the 'Committee') and the Debtors’ senior secured creditors, (iii) sold several other noncore assets held by the Debtors’ estates for proceeds exceeding $15 million, (iv) established procedures and deadlines for asserting claims against the Debtors and (v) have otherwise been focused on an efficient administration of the Debtors’ estates for the benefit of creditors.
More recently, the Debtors have been in discussions with the Committee regarding the terms of a proposed chapter 11 plan and expect to file a chapter 11 plan, disclosure statement, and motion for approval of solicitation procedures in the coming weeks. By this Motion, the Debtors request reasonable incremental extensions of the exclusive periods so that they can finalize, file and prosecute a plan for the benefit of the Debtors’ creditors.”
The motion further states," In addition, the Debtors have made significant efforts to resolve open issues regarding numerous matters in these chapter 11 cases with the U.S. Trustee, their creditor constituencies and certain third parties. From constant e-mail correspondence to frequent telephone conferences, the Debtors and their advisors have maintained regular contact with parties on matters large and small. The Debtors’ efforts to promote consensus further support the extension of the Exclusive Periods.
The Court scheduled a hearing on the motion for November 19, 2020, with objections due by November 12, 2020.
Further to an August 3rd bidding procedures order [Docket No. 285], the Debtors filed a notice (i) cancelling a scheduled August 12th auction and (ii) designating stalking horse SPARC Group LLC (“SPARC” ) as the successful bidder in respect of substantially all of the Debtors' assets. An amendment to SPARC's asset purchase agreement (the “APA”) which amends purchase price terms to reflect the new $325.0mn price tag (up from $305.0mn), is attached to the notice as Exhibit A [Docket No. 375]. The amendment also provides that the transaction would close on August 31st and conspicuously leaves in place a $10.25mn termination payment should the "Sellers enter into a definitive agreement with respect to a Competing Bid…"
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