Alexander Gallo Holdings seeks to amend stalking horse agreement

By Jim Witters

Wilmington, Del., Sept. 26 - Alexander Gallo Holdings, LLC filed an amended stalking horse purchase agreement on Friday in the U.S. Bankruptcy Court for the Southern District of New York.

The revisions to the Sept. 15 agreement with debtor-in-possession financing lender Bayside Gallo Recovery, LLC include

• Naming of Bayside affiliate Bayside Gallo Acquisition, LLC as the stalking horse bidder;

• A purchase price consisting of the release of the company obligations relating to the DIP financing agreement and the second-lien note purchase agreement, which are estimated at $9.62 million; the accounts payable under the existing first-lien facilities as of the closing date, estimated at $48 million; wind-down and professional fees of $4.62 million; and cure costs estimated at $3.95 million;

• A provision that any proceeds from a purchase and sale agreement relating to Esquire Litigation Solutions, LLC by and among DTI of California, LLC, will go to the buyer;

• A provision that all assets with respect to any benefit plan of the sellers, whether in a trust or otherwise, go to the buyer;

• Language stating that the sale includes all intellectual property owned in whole or in part by the debtors. Previous language limited the sale to trademarks, trade names and logos;

• The sellers' 401(k) plan will be transferred to the buyer's 401(k) plan; and

• A clause stating that as of the closing date, transferred employees will no longer be eligible to contribute to the flexible spending account sponsored by the sellers, except as provide by Cobra. The buyer will establish flexible spending accounts and permit immediate participation on the first day of the month following closing.

If Bayside is not the high bidder, Alexander Gallo Holdings will pay it a breakup fee equal to 3.75% of its proposed purchase price and reimburse up to $1 million of its expenses.

A hearing on the revised motion is scheduled for 9 a.m. ET on Sept. 27.

Alexander Gallo Holdings is an Atlanta-based parent company to privately owned court reporting and litigation solutions companies Esquire Solutions and Sanction Solutions. The company filed for bankruptcy on Sept. 7. The Chapter 11 case number is 11-14220.

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