HMX Acquisition bid procedures approved for sale to Authentic Brands

By Caroline Salls

Pittsburgh, Nov. 7 - HMX Acquisition Corp. received court approval of the bid procedures for the proposed sale of substantially all of its assets to Authentic Brands Group, LLC, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Authentic Brands will provide a long-term license of HMX's brands to a new entity.

The new entity will retain the company's employees, operate the existing brands and operate HMX's manufacturing facilities.

According to the sale motion, the stalking horse purchase agreement with Authentic Brands provides for a going concern sale and, only if specified conditions are not met, the agreement "toggles" to a liquidation sale.

HMX said the stalking horse bid provides a purchase price that will pay its secured lender in full in cash, provide enough additional cash to pay all expected administrative claims and pay a projected dividend to unsecured creditors.

Specifically, the company said the total purchase price will equal the sum of the total amount of the Salus pre-bankruptcy and post-bankruptcy lender claims, plus $5.1 million for HMX's bankruptcy estates.

If the buyer and licensee fail to execute a license agreement no later than three business days before the auction, the purchase price will equal the sum of the Salus claim, plus $9.1 million for the bankruptcy estates.

If Authentic Brands is not ultimately the high bidder for the assets, HMX will pay it a $2.2 million break-up fee, and up to $425,000 of its sale-related expenses will be reimbursed.

Competing bids are due by 5 p.m. ET on Dec. 6.

If one or more bids are received, an auction will be held on Dec. 10. The sale hearing is scheduled for Dec. 13.

HMX, a New York-based tailored clothing company, filed for bankruptcy on Oct. 19. The Chapter 11 case number is 12-14300.

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