Robb & Stucky files Chapter 11 bankruptcy, looks to sell assets

By Caroline Salls

Pittsburgh, Feb. 22 - Robb & Stucky Ltd. LLLP filed Chapter 11 bankruptcy Friday in the U.S. Bankruptcy Court for the Middle District of Florida.

Chief restructuring officer Kevin Regan said in a statement filed with the court that the company filed for bankruptcy to stabilize its operations and facilitate a going-concern sale of its assets.

The company has entered into a stalking horse liquidation agency agreement with a joint venture comprised of Hudson Capital Partners, LLC and Hyperams, LLC.

Robb & Stucky said the stalking horse agreement will allow it to consider any and all bids for any of its assets, whether the bidder plans to operate the assets as a going concern or liquidate them under an agency agreement.

The guaranteed amount to be paid to Robb & Stucky under the stalking horse bid would be 75.2% of the total cost value of the merchandise in the liquidating locations.

To the extent that proceeds exceed the sum of the guaranteed amount, expenses of the sale and 6% of the cost value of the merchandise, then all remaining proceeds would be shared, with 60% going to the merchant and 40% to the agent.

The sales are scheduled to begin in mid-March and must end by June 30.

After the starting bid, subsequent bids at auction must provide at least $625,000 more in incremental value.

The bid deadline is 4 p.m. ET on March 4, the auction will be held on March 7, and the sale hearing is scheduled for March 8.

If the joint venture is not the high bidder, the company will pay it a combined break-up fee and expense reimbursement of $475,000.

Regan said Robb & Stucky has "faced significant financial challenges since 2007 and is currently faced with a liquidity crisis that has necessitated its petition for relief."

DIP loan terms

In connection with the bankruptcy, filing, the company has obtained a commitment for $25 million of debtor-in-possession financing from Bank of America, NA.

Proceeds will be used to repay pre-bankruptcy debt, for working capital and to pay fees and expenses.

Pricing on the DIP loan is Prime rate plus 325 bps.

The facility will mature on the earliest of April 22, the effective date of a plan of reorganization, the effective date of a sale of the lender's collateral and upon conversion or dismissal of the Chapter 11 case.

Debt details

According to court documents, Robb & Stucky had $50 million to $100 million in both assets and debt. However, according to Regan's statement, the company's total debt increased to $137.04 million in 2010.

The company's largest unsecured creditors include:

• Ryan Cos. US Inc. of Cedar Rapids, Iowa, with a $1.13 million landlord claim;

• Woodard of Dallas, with a $1.13 million supplier claim; and

• Marge Carson of Rosemead, Calif., with a $1.05 million supplier claim.

The company is represented by Berger Singerman PA.

Robb & Stucky is a Sarasota, Fla.-based retailer of upscale, high-end furnishings. Its Chapter 11 case number is 11-02801.

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