Signature Styles, owner of Spiegel Brands and other clothing companies, has run into trouble with their Chapter 11 bankruptcy. The trustee in the case told a bankruptcy judge that Signature Styles shouldn’t receive approval of its proposed bidding procedures. Signature Styles is a division of private equity firm Patriarch Partners and was formed to purchase Spiegel Brands in 2009.
Under the procedures, Artemiss LLC, a newly formed division of Patriarch Partners, is to become the stalking horse bidder in exchange for assumption of $30 million in debt.
Court documents show that the official committee of unsecured creditors in the case is “gravely concerned that the sale process currently proposed by the debtors is woefully deficient, crafted solely to benefit Patriarch, provides no benefit to the debtors estates and is nothing more than half-hearted window dressing intended to cloak Patriarch’s efforts to cleanse the debtors’ balance sheet of unsecured indebtedness with the appearance of fairness and equity.”
The committee asked the court to take an active role in the sale process by soliciting alternative sales proposals. If the court chooses a stalking horse bidder, the process moves to a 363 sale auction. Multiple parties are invited to the auction and could outbid Artemiss and buy the company.
Artemiss wins the auction at the agreed upon price provided no other party outbids them.
The Spiegel company originated in Chicago in 1865.
Benjamin Brand Services – Chicago bankruptcy attorney