RoomStore wins approval of agency agreements for store-closing sales

By Caroline Salls

Pittsburgh, June 28 - RoomStore, Inc. received court approval to hold going-out-of-business sales and enter into agency agreements with Hilco Merchant Resources LLC and Furniture Asset Acquisition LLC, according to a Thursday filings with the U.S. Bankruptcy Court for the Eastern District of Virginia.

Specifically, Furniture Asset Acquisition will conduct going-out-of-business sales at eight of RoomStore's locations, and a joint venture comprised of Hilco, SB Capital Group, LLC, Planned Furniture Promotions, Inc. and Tiger Capital Group, LLC will conduct the going-out-of-business sales at the company's remaining stores.

The agency agreement orders set a Nov. 15 sale termination date, but that date can be extended to Nov. 30 for any store with the consent of affected landlords.

Under the Hilco agency agreement, the joint venture has guaranteed that RoomStore will receive 59% of the total cost value of the merchandise located in the company's inventoried locations.

In addition, the agent will pay RoomStore a $75,000 recovery amount. The joint venture also guaranteed that RoomStore will receive an additional $200,000 from the net proceeds of the sale of additional agent merchandise in the remaining stores.

Meanwhile, under the Furniture Acquisition agreement, RoomStore will receive a guaranteed 100% of the total cost value of merchandise located in the inventories locations, as well as $1.35 million for the transfer of designation rights, $125,000 for the transfer of an exclusive license and $25,000 for the transfer of customer lists.

The stores covered by the Furniture Acquisition agreement are located in North Carolina, South Carolina and Virginia, and the stores covered by the Hilco agreement are located in Maryland and Virginia.

Richmond, Va.-based 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. The Chapter 11 case number is 11-37790.

© 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.