Ultimate Electronics' bidding procedures approved for April 7 auction date

By Ellen Chang

Houston, March 28 - Ultimate Electronics, Inc.'s bidding procedures to find a seller for its store closing sales were approved Thursday by the U.S. Bankruptcy Court for the District of Delaware.

The company will hold an auction on April 7 to select a seller who will dispose of inventory in stores the company plans to close.

Under the guidelines, prospective bidders would have to register by April 4 and pay a good faith deposit of $1 million.

If there is more than one qualified bidder, an auction will be held at 11 a.m. ET on April 7.

Ultimate asked for a hearing to approve the winning bidder and the store closings on April 8.

As part of the bidding process, Ultimate is seeking authority to name a stalking horse bidder. If the stalking horse bidder does not win the auction, that bidder would be entitled to a termination fee of $150,000 or 2% of the transaction's value, whichever is less.

Ultimate currently operates 65 stores but is looking to shutter underperforming or unprofitable stores plus outlets in markets where it no longer intends to operate.

Ultimate, a Thornton, Colo.-based consumer electronic retailer, filed for Chapter 11 on Jan. 11. Its case number is 05-10104.

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