RoomStore sale procedures approved for Mattress Discounters interests

By Jim Witters

Wilmington, Del., Sept. 26 - RoomStore, Inc.'s Chapter 7 trustee received approval for bid procedures for the sale of RoomStore's interest in Mattress Discounters Group, LLC, according to documents filed Sept. 26 with the U.S. Bankruptcy Court for the Eastern District of Virginia.

RoomStore holds a 65% membership interest in Mattress Discounters, a chain of 80 retail stores that is worth between $7.8 million and $19.5 million, according to court documents.

As part of an agreement to forestall litigation, the trustee has agreed to sell the interests to Raymond T. Bojanowski if an auction fails to produce a bid of $10 million or more.

Bid procedures

Under the approved sale procedures

• The bid deadline is noon ET on Oct. 25;

• The trustee will review each competing bid to determine if it qualifies;

• The trustee will file a notice by Oct. 26 stating whether an auction will be conducted;

• An auction, if needed, will be on Oct. 29;

• Bids at auction must be in minimum increments of $50,000;

• Should the $10 million minimum bid not be met, the trustee will sell the interests to Bojanowski under the terms of the undisclosed backstop agreement;

• A sale hearing will be scheduled on or before Oct. 31; and

• Closing on the sale must occur no later than one day after the court enters the sale order.

Home furnishing retailer RoomStore emerged in 2005 as the surviving company from Heilig-Meyers Co.'s Chapter 11 case. The company filed for bankruptcy on Dec. 12, 2011 under Chapter 11 case number 11-37790.

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