A Bronx retailer has won a judge’s approval to sell its assets, estimated to be worth over $16 million, to help liquidate the business and pay creditors. In addition to the inventory, the courts also allowed for the sale of the company’s intellectual property as well as its list of customers. Those items have been sold for $850,000. The retailer, Loehmann’s Holdings Inc., operates in 11 states with 40 stores and specializes in the sale of designer fashions at a discount.
The buyers are negotiating the terms and have offered 29.8 percent for the inventory. The retailer will also begin to conduct closing sales at its store locations soon. This is not the first bankruptcy for Loehmann’s as it filed for Chapter 11 twice in the past. The retailer seeking bankruptcy is controlled by a parent company that may receive some of the proceeds of the sale. Several unsecured creditors object to that provision and have launched an investigation into whether those claims are valid.
Other objections have been brought by the U.S. Trustee. They are concerned with the company’s plan to pay $655,250 in bonuses to two company officers without proof of valid reason for doing so. The company has asked for, and been granted, additional time to respond to the U.S. Trustee.
A business owner considering bankruptcy may solicit advice from an attorney before proceeding. Business bankruptcy has many aspects to consider and options may include restructuring of debt or other alternatives without filing for full bankruptcy protection.
Source: Bloomberg, “Loehmann’s Bankruptcy Judge Approves Sale of Inventory“, Tiffany Kary, January 07, 2014by