Townsends seeks court OK to take bids for substantially all assets

By Caroline Salls

Pittsburgh, Jan. 25 - Townsends, Inc. requested court approval of the bid procedures for the proposed sale of substantially all of its assets, according to a Monday filing with the U.S. Bankruptcy Court for the District of Delaware.

No stalking horse bidder has been selected, but the procedures do allow the company to select one before the bid deadline.

If a stalking horse bid is selected, Townsends would pay that bidder a break-up fee of no more than 3% of its offer if it is not the high bidder at auction.

Townsends said several interested parties are completing due diligence and negotiating forms of asset purchase agreements at this time, but no asset purchase agreement has been signed yet.

Under the proposed bidding procedures, the assets can be sold to a single buyer or in parts to multiple buyers.

Bids are due by noon ET on Feb. 14 and must include a 10% deposit toward the proposed purchase price. The auction will be held on Feb. 15 if qualified bids are received.

Bidding at auction must be made in increments of at least $500,000.

Townsends, a Georgetown, Del.-based poultry processor, filed for bankruptcy on Dec. 19. Its Chapter 11 case number is 10-14092.

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