Judge approves Boscov’s bankruptcy sale plan
By Randall Chase, The Associated PressWILMINGTON, Del. - A Delaware bankruptcy judge Wednesday approved fast-tracked plans for an auction sale of Pennsylvania-based department store chain Boscov's later this month.
Judge Kevin Gross accepted Boscov's proposed bid deadline of Oct. 15, followed by an auction Oct. 20 and sale hearing the next day.
Boscov's attorney David Heiman told the court that investors interested in bidding for Boscov's want assurances that they will be able to take advantage of sales during the upcoming holiday shopping season.
''The survival of Boscov's as a going concern is greatly at risk unless we are able to consummate a transaction prior to the Christmas season,'' Heiman said.
While acknowledging that certain aspects of the proposed sale procedure were unusual, Gross said Boscov's has ''a sterling reputation,'' and that the company, along with its creditors, employees, customers and the communities in which it operates, warrants ''some greater leeway from the court than what otherwise may be the case.''
''The timing is appropriate,'' the judge said. ''The court is fully aware that the Christmas season is critical to the sale process.... If we allow delay, then we're just going to be hurting the estate.''
Philadelphia-based Versa Capital Management has emerged as the lead bidder for Reading, Pa.-based Boscov's, which filed for Chapter 11 protection in August and announced that it would close 10 of its 49 stores. Versa has offered to pay $11 million in cash and assume Boscov's debt in a deal valued at about $288 million.
Anup Sathy, an attorney representing Versa, said that if the investment group doesn't take control of Boscov's by Halloween, ''it's a much different economic situation from our perspective.''
''For this asset, we believe the holiday season has already started, because we believe there needs to be additional stocking (of goods) now,'' Sathy added.
But the proposed bidding process, particularly its tight timeline, led to objections from other interested parties.
Dustin Branch, an attorney for a company that leases space to Boscov's at shopping centers in Deptford, N.J., and Salisbury, Md., said his client needs more time to assess Versa and other potential bidders to ensure that the landlord's interests are protected. Other landlords have expressed similar concerns.
''We don't want to stop the sale, we just want a process that's fair to landlords,'' Branch said.
Brad Erens, an attorney for Boscov's, said the company will work with Versa to give landlords the assurances that they need before the auction.
Joseph McMahon Jr., an attorney representing the U.S. trustee, raised several objections to the proposed bidding procedures, arguing that Boscov's seems to be impermissibly favoring Versa over other bidders. McMahon noted that Versa was not required to post a good-faith deposit, and that it is getting information about competing bids while there is no provision for the other bidders to receive the same information.
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maxnit
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10-07-08 11:59 PM
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Maybe the reason there so far in debt is there business planning. Look how long there finished building sat at loagan town center before it ever opened! Maybe we should think about where we build and I know alot of us in the area cant afford the prices at that store
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srjmsbnd
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10-07-08 6:31 PM
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Republicans fiddle and lie as American and the world economy burn. The headline read "Banking crisis sweeps Iceland and Britain"
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