Aerosoles granted approval of GBG settlement; THL objection overruled

By Caroline Salls

Pittsburgh, May 14 – AGI Holdco, Inc., which does business as Aerosoles, received court approval of an asset purchase agreement termination lawsuit settlement reached in March with GBG USA Inc., according to an opinion filed Monday with the U.S. Bankruptcy Court for the District of Delaware.

In December 2017, Aerosoles and GBG reached an agreement under which GBG would purchase Aerosoles’ inventory, leases and distribution contracts, and Aerosoles would license its intellectual property to GBG.

After Aerosoles’ plan confirmation process was delayed by an adversary proceeding related to a rejected license agreement, GBG terminated the purchase agreement.

Aerosoles filed a lawsuit against GBG in August 2018, alleging that GBG improperly terminated the purchase agreement.

As previously reported, Aerosoles pre-bankruptcy term loan agent THL Corporate Finance, Inc. said in an April court filing that it had been unable to resolve a dispute with Polk 33 Lending, LLC regarding the distribution of the $4.2 million in settlement proceeds.

Monday’s order overrules THL’s limited objection to Aerosoles’ settlement with GBG.

THL said it strongly believes that it is entitled to a significant portion of the $4.2 million in settlement proceeds and that it holds a first lien on all proceeds derived from its collateral.

The lender agent said it favored a methodology that would allocate the settlement proceeds under the same formula the court used in its March ruling on allocation of sale proceeds.

Since the court’s allocation decision found that “the lion’s share” of the company’s residual goodwill value was attributable to its intellectual property, THL said $1.2 million of the $1.4 million in residual value, or 84% of the value, was allocated to THL.

As a result, THL said it is entitled to roughly $3.61 million of the settlement proceeds, with Polk getting the rest.

Aerosoles is an Edison, N.J.-based global footwear company. The company filed bankruptcy on Sept. 15, 2017 under Chapter 11 case number 17-11962.

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