Hancock Fabrics sale procedures approved; auction set for March 29

By Caroline Salls

Pittsburgh, Feb. 24 – Hancock Fabrics, Inc. received court approval of the bid procedures for the sale of company assets, according to an order filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, Hancock requested court approval of the bid procedures for the sale of its assets through a proposed going-out-of-business sale. Great American Group has agreed to serve as “back-up” bidder to conduct the sale, guaranteeing the company 108% of the cost value of its inventory. The back-up bid will serve as a baseline offer for negotiations with prospective bidders.

The company will pay Great American a $700,000 break-up fee if the chosen bidder will not operate the stores as a going concern or a break-up fee of $180,000 plus $2,811 for each store to be liquidated if some, but not all, of Hancock’s 185 stores will be operated as going concerns.

Hancock will also reimburse up to $100,000 of Great American’s sale-related expenses.

The bid deadline is 5 p.m. ET on March 24. The auction will be held on March 29, if necessary, and the sale hearing is scheduled for March 31.

Hancock Fabrics, a Baldwyn, Miss.-based specialty retailer of fabric and related home sewing and decorating accessories, filed for bankruptcy on Feb. 2. The Chapter 11 case number is 16-10296.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.