Beauty Brands Gets Nod For Bid Procedures With New Buyer - Dyxy Cosmetics Harga Promosi Setiap Bulan Dengan kami

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Beauty Brands Gets Nod For Bid Procedures With New Buyer

Beauty Brands
A Delaware bankruptcy judge on Wednesday gave his nod to bid procedures for cosmetics retailer Beauty Brands LLC’s planned Chapter 11 sale, with a new stalking horse offer in place to sell 23 of the company’s stores and continue operating them as a going concern.

At a hearing in Wilmington, U.S. Bankruptcy Judge Christopher S. Sontchi signed off on bid procedures for Beauty Brands' planned Chapter 11 sale and set a sale hearing for Feb. 12. Beauty Brands plans to pursue a going-concern sale of 23 of the company’s “core” stores to stalking horse bidder Absolute Beauty LLC pending any better offers at an auction scheduled for Feb. 7.

Last week, Beauty Brands founders David and Robert Bernstein told the court the offer from their entity Absolute Beauty was better than a prior proposed stalking horse offer submitted by liquidator Hilco Merchant Resources LLC because it would save roughly 875 jobs and continue operations at the 23 stores.

Beauty Brands attorney Gregory A. Taylor of Ashby & Geddes PA told the judge on Wednesday that the proposal from Absolute Beauty includes certain “enhancements” over the prior offer, including the going-concern purchase of the stores, saved jobs, a $1 million payment for inventory at the company’s distribution center and the assumption of up to $853,000 in liabilities.

Under Absolute Beauty’s offer, Beauty Brands will receive $4.65 million for the 23 “core” stores, and bid protections will include a $190,000 breakup fee to be paid to Absolute Beauty if the sale is not finalized, Beauty Brands said. Hilco’s previous stalking horse offer had included a $250,000 breakup fee and a $50,000 expense reimbursement, according to court filings.

“This ensures and means that there will be a going concern of part of this business,” said Absolute Beauty attorney Joshua A. Sussberg of Kirkland & Ellis LLP. “This is a huge positive development.”

Regina Stango Kelbon of Blank Rome LLP, attorney for Beauty Brands’ post-petition financing agent PNC Bank NA, raised concerns about delays if Absolute Beauty is not able to close the sale. She also raised red flags that the “net cash” to be received in the Absolute Beauty offer is not better than the Hilco bid, but said PNC bank would not “stand in the way” of the new stalking horse proposal.

The previous stalking horse offer from Hilco proposed that the liquidator would guarantee that the sale of merchandise at 33 core stores would bring in $12.25 million to $12.45 million. Hilco is also already running going-out-of-business sales at 23 noncore stores, which began Jan. 3. Beauty Brands is set to get 65 percent of proceeds from the store-closing sales, with the sales expected to bring in $5.25 million to $5.45 million.

If Hilco had been the successful bidder for the sale of merchandise at the 33 core stores, it would have given the debtors 80 percent of proceeds from sales at all the stores.

Beauty Brands said the agreement with Hilco will now be amended, including a proposal for Hilco to liquidate the 10 other core stores not covered by Absolute Beauty’s stalking horse offer with the debtors set to receive 63 percent of the revenue from merchandise sales at those stores.

Jason R. Adams of Kelley Drye & Warren LLP, who represents the official committee of unsecured creditors, said the committee supports Absolute Beauty’s going-concern offer over Hilco’s liquidation proposal.

“We are hopeful this will set a floor and that we are not done here,” Adams said of the potential for better offers at the auction scheduled for next month.

Beauty Brands filed for Chapter 11 protection earlier this month, citing declining sales and rising costs associated with doing business as a primarily brick-and-mortar retailer. Founded in 1995, the Kansas City, Missouri-based Beauty Brands operates specialty beauty stores that sell products and provide spa and salon services.

Beauty Brands is represented by Gregory A. Taylor, Stacy L. Newman, Katharina Earle and David F. Cook of Ashby & Geddes PA.

The committee of unsecured creditors is represented by Mark Minuti and Lucian B. Murley of Saul Ewing Arnstein & Lehr LLP, and Eric R. Wilson, Jason R. Adams and Lauren S. Schlussel of Kelley Drye & Warren LLP.

Absolute Beauty is represented by Domenic E. Pacitti of Klehr Harrison Harvey Branzburg LLP, and Joshua A. Sussberg and Gene Goldmintz of Kirkland & Ellis LLP.

The case is In re: Beauty Brands LLC et al., case number 1:19-bk-10031, in the U.S. Bankruptcy Court for the District of Delaware.

Source from; www.kirkland.com

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