Pegasus Home sets bid procedures for assets, seeks Oct. 27 auction

By Sarah Lizee

Olympia, Wash., Aug. 29 – Pegasus Home Fashions, Inc. is seeking approval of bid procedures for its assets, according to a motion filed Monday with the U.S. Bankruptcy Court for the District of Delaware

As previously reported, the company has lined up a stalking horse agreement with an affiliate of prepetition secured lender Blue Torch Finance, LLC. Webster and Blue Torch are prepetition secured lenders to the company.

The purchase price would include assumed liabilities, assumption of or payment in cash of all debt under a prepetition revolver, and a credit bid of prepetition term loan debt and debtor-in-possession term loan debt.

The agreement provides for an expense reimbursement of up to $1 million.

Under the proposed bid procedures, the bid deadline would be 5 p.m. ET on Oct. 24, an auction would take place on Oct. 27, and a sale hearing would occur on Nov. 2.

Competing bids must be greater than the sum of the stalking horse purchase price, the amount of the expense reimbursement, and a $200,000 minimum bid increment.

Elizabeth, N.J.-based Pegasus Home Fashions manufactures bedding and home products. The company filed bankruptcy on Aug. 24 under Chapter 11 case number 23-11235.

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