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Rhodes seeks court OK of bidding procedures for $38.81 million furniture store asset sale
By Caroline Salls
Pittsburgh, July 26 - Rhodes Inc. requested court approval of the bidding procedures and its selection of RoomStore Inc., Hilco Merchant Resources LLC and Hilco Real Estate LLC (together RoomStore) as stalking horse bidder for its proposed $38.81 million sale of its Southwest retail furniture operations assets, according to a Monday filing with the U.S. Bankruptcy Court for the Northern District of Georgia.
Rhodes said the Southwest market includes Rhodes' best stores in terms of financial performance, and therefore the sale would yield significant benefits for its creditors and estates.
The assets are divided into two groups under the purchase agreement.
The first group consists of more than 30 stores, distribution centers, home delivery centers and related assets, including merchandise inventory, all of which RoomStore intends to acquire on a "going concern" basis.
The second group consists of the stores, distribution centers or home delivery centers that would be liquidated in store closing or going-out-of-business sales. Under the agreement, Hilco Merchant Resources will act as exclusive agent for store closing sales at these locations.
The purchase price is subject to a post-closing adjustment based on the merchandise inventory level at closing.
RoomStore or another high bidder would be required to pay a $1.5 million deposit on execution of the sale agreement.
A $1.18 million break-up fee will be paid to RoomStore if it is not the high bidder at auction.
Rhodes, an Atlanta-based furniture retailer, filed for bankruptcy on Nov. 4, 2004. Its Chapter 11 case number is 04-78434.
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