Reorg

Bon-Ton

Two Liquidation Bids for Substantially All Bon-Ton Assets Go Forward; Auction to Resume at 9 am After Late Night at Counsel’s Office

Tue 04/17/2018 06:23 AM

The Bon-Ton auction began shortly before midnight on Monday evening after a long day of negotiations and formalizing of bids at the offices of debtors’ counsel Paul Weiss, according to sources. The auction will resume today at 9 a.m. ET, the sources add.

Only two qualified bids for substantially all the debtors’ assets - both of which are liquidation bids - are going forward in the auction: the joint credit bid submitted by an ad hoc group of second lien noteholders and Great American (an affiliate of second lien noteholder B. Riley Financial), and a bid submitted by the Hilco Merchant Resources and Gordon Brothers Retail Partners joint venture, the sources add. Last Friday, April 13, the debtors filed notice that they had selected the Hilco/Gordon Brothers bid as the baseline bid for the debtors’ merchandise and owned FF&E. The second lien noteholders’ joint bid is for all of the debtors’ assets, including real estate.

On Monday evening, Kelley Cornish of Paul Weiss for the debtors began the auction by announcing the Hilco/Gordon Brothers bid as the stalking horse bid; counsel for the stalking horse bidder then bid 31 cents of retail value for the inventory, sources say.

Counsel for the second lien noteholders, Sidney Levinson of Jones Day, then spoke for his clients and argued that the stalking horse bid is not a qualified bid, sources add. He stated that his clients will return today with their counter-bid, according to sources.

Bon-Ton’s 8% second lien notes due June 2020 last traded in round lots at 18.25 on April 12, according to TRACE.

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