United Retail Group: court approves bid procedures for asset sale; auction set for March 28

By Lisa Kerner

Charlotte, N.C., Feb. 23 - United Retail Group, Inc.'s bid procedures for the sale of substantially all of its assets or the liquidation of its merchandise was approved, according to a filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, United Retail said Versa Capital has agreed to buy the company's assets through the bankruptcy process for cash and the assumption of specified liabilities.

According to a statement filed with the court, Versa will pay up to $15 million of debtor-in-possession financing, up to $2 million of wind-down costs for Avenue's estates, $500,000 to holders of unsecured claims, up to $11.1 million for administrative and priority claims, up to $2.2 million of Redcats Asia Ltd. trade payables and up to $4.7 million of post-closing liabilities.

In addition, Versa will commit to capitalize the acquisition vehicle with $13 million at closing and will guarantee up to $35 million of payment obligations.

Also under the Versa agreement, parent company Redcats USA will pay Versa $20 million in cash, prorated in connection with the number of leases assumed at closing.

Versa Capital has agreed to operate United Retail's Avenue business as a going concern while keeping the majority of Avenue stores open, the release said.

The company said the sale process is expected to be completed on an "expedited timeframe."

Qualified bids for the sale auction are due on March 20.

The auction for the assets will be held on March 28.

A sale hearing will be held on April 3.

United Retail is a Rochelle Park, N.J., specialty retailer of large-size women's fashion apparel, footwear and accessories. The Chapter 11 case number is 12-10405.

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