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November 2, 2020 – Further to its October 2nd bidding procedures order, and following the Debtors' cancellation of an October 23rd auction, the Court hearing the Cosmoledo cases has issued an order approving the sale of substantially all the Debtors’ assets to credit bidding stalking horse MK USA, LLC (the “Stalking Horse”) [Docket No. 166]. The asset purchase agreement (the “APA,” including a November 1st amendment) governing the terms of the sale is attached to the order at Appendix A.
The Stalking Horse is an affiliate of Aurify Brands, and the APA details an agreement further to which Aurify was entitled to credit bid the senior debt ($72.7mn) which it purchased from prepetition shareholder (as well as lender) Moussechoux, Inc. ("Mousse") for $2.0mn on September 10th. The Stalking Horse will also pay $3.0mn in cash and assume certain liabilities in a deal that "that provides for value equal to (or greater than) $8,400,000.00."
The APA amendment makes a minor adjustment to the purchase price which is now:
"The aggregate consideration for the sale and transfer of the Purchased Assets (the “Purchase Price”) shall be (a) $600,000 (the “Deposit”), plus (b) (i) $2,400,000, minus (ii) the Agreed Price Deductions (the resulting amount the “Closing Date Cash Payment” and, together with the Deposit, the “Cash Consideration”) plus (c) the Credit Bid plus (d) the assumption of the Assumed Liabilities'.”
in place of…
"The aggregate consideration for the sale and transfer of the Purchased Assets (the “Purchase Price”) shall be (a) $600,000 (the “Deposit”), plus (b) $2,400,000 (the “Closing Date Cash Payment” and, together with the Deposit, the “Cash Consideration”) plus (c) the Credit Bid plus (d) the assumption of the Assumed Liabilities."
where “Agreed Price Deductions” shall mean $21,610.
Aurify Brands has also recently purchasing the bakery assets (40 restaurant/bakeries) of Eric Kayser competitor PQ NY (dba as "Le Pain Quotidien") out of bankruptcy for $3.0mn. PQ NY had its own liquidation Plan declared effective on September 30th.
On September 10, 2020, Cosmoledo, LLC and 20 affiliated Debtors (dba Eric Kayser, “Cosmoledo” or the “Debtors”), an artisanal baker with 16 bakery/restaurant locations in New York City, filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York, noting $4.8mn of total assets and $87.2mn in total liabilities.
Between January 29, 2016 and February 26, 2018, Cosmoledo entered into a series of notes (the “Prior Notes”), payable to Mousse to fund the Debtors’ operations and growth strategy. The aggregate principal amount of the Prior Notes was $59.0mn
On March 6, 2019, Cosmoledo entered into a Debt Purchase Agreement (the “Debt Purchase Agreement”), pursuant to which Cosmoledo exchanged the Prior Notes for eight amended and restated promissory notes (the “Amended Notes”). Pursuant to the Note Purchase Agreement, the Debtor also issued a new note to the Original Secured Creditor (the “New Note,” and together with the Amended Notes, the “Notes”), in the same form as the Amended Notes, for $10.0mn, thereby raising the total principal borrowed to $69.0mn.
As of September 8th, there was $72,742,418.00 (including interest) outstanding in respect of the Notes.
About the Debtors
According to the Debtors: “Maison Kayser, a global brand, is an authentic, artisanal French boulangerie initially formed in Paris in 1996. Maison Kayser has approximately 150 shops in over 22 different countries.
Cosmoledo, a Delaware limited liability company, was formed on December 21, 2010,and the Company opened its first Store located at 1294 Third Avenue in New York City in 2012.
Until recently the Company operated sixteen (16) locations in New York City. The company also leases a commissary for consolidated production and owns a piece of fee owned real property located at 668 East 135th Street, Bronx, New York.
Each of the Stores is a “fine casual” dining concept that follows one of the following business models or combines models tailored to the anticipated market. Three of these four business models derive a percentage of their revenue from in-Store dining.
- Full Expression (bakery, restaurant & grab and go)
- Residential (bakery & restaurant)
- Bakery & Grab and Go
- Bakery, Grab and Go, & Made-to-Order (no in-Store dining)
The Debtors’ production and operational costs are historically high because of the nature of their business concept. The company’s trade name derives from its namesake and licensor, Eric Kayser. Mr. Kayser has long been recognized as one of the most talented artisan bakers of his generation and has built his reputation on his passion for bread, the quality of his products and his incredible skill to combine authenticity and innovation in the world of French artisanal bakeries."
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