Hastings stalking horse bid calls for payment of 75% of inventory cost

By Caroline Salls

Pittsburgh, July 15 – Hastings Entertainment, Inc. entered into a stalking horse asset purchase agreement with Hilco Merchant Resources, LLC and Gordon Brothers Retail Partners, LLC, according to a motion filed Thursday with the U.S. Bankruptcy Court for the District of Delaware.

Hastings said the agreement provides for a guaranteed payment of 75% of the cost of its inventory based on in excess of $110 million of inventory. The company said this payment provide more than $82 million in proceeds.

If Hilco and Gordon Brothers are not the high bidder, Hastings will pay them a $1.35 million break-up fee, reimburse up to $150,000 of their sale-related costs and expenses and reimburse up to $525,000 in signage costs.

Competing bids must guarantee at least 77% of the cost of the company’s inventory and must include an agreement to reimburse the signage costs of the stalking horse bidder.

A hearing on approval of the bid protections is scheduled for July 18.

Amarillo, Texas-based Hastings Entertainment is a multimedia entertainment retailer. The company filed bankruptcy on June 13 under Chapter 11 case number 16-11452.

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