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Malden Mills enters new purchase agreement with Chrysalis Capital Partners for $44 million asset sale
By Jennifer Lanning Drey
Portland, Ore., Jan. 25 - Malden Mills Industries, Inc. entered into a new $44 million purchase agreement with Chrysalis Capital Partners, LP for the proposed sale of all of the company's assets, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Massachusetts.
The company had previously named Gordon Brothers Group, LLC as the stalking horse bidder for the asset sale. However, the agreement with Chrysalis includes a less-costly breakup fee, according to the filing.
Under the new agreement, Malden Mills will pay Chrysalis $500,000 for expenses incurred in connection with the transaction if it is not consummated by March 5.
The previous agreement with Gordon Brothers called for Malden Mills to pay a $620,000 topping fee and up to $700,000 in fees and expenses if Gordon Brothers was not the high bidder.
Also under the new agreement, Chrysalis will pay a deposit of 5% of the purchase price, to be held in escrow.
The minimum overbid must be for at least $250,000 more than the $44 million stalking horse bid, plus the amount of any topping fee and the expense reimbursement.
Other bids at auction must be made in increments of $100,000.
Malden Mills said in a previously filed motion that because of its deteriorating financial condition and lack of liquidity, it has decided to sell substantially all of its assets to benefit creditors and other parties of interest.
Malden Mills, a Lawrence, Mass.-based textile company, filed for bankruptcy on Jan. 10 in the U.S. Bankruptcy Court for the District of Delaware. The case was transferred to the Massachusetts court on Jan. 16. Its Chapter 11 case number is 07-40124.
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