Galey & Lord gets court approval for modified bidding procedures

By Jeff Pines

Washington, Sept. 27 - Galey & Lord Inc. obtained court approval for modified bidding procedures for its assets, according to an order filed Friday with the U.S. Bankruptcy Court for the Northern District of Georgia.

Bidders will be able to bid for all of the company's assets or for lots of assets. The lots are broken down by subsidiaries all the way down to enabling interested parties to bid on just the machinery in a plant. In all, there are more than 40 lots.

Patriarch Partners LLC is the stalking horse bidder for all of the textile company's assets.

Bidding must be in $250,000 increments.

The company's decision on who wins the auction or auctions will be made with BNY Asset Solutions LLC, the agent for Galey & Lord's term loan.

If Patriarch is not the winner of the auction, it will get a $3.3 million break-up fee.

Competing bids for all of the company's assets must include Patriarch's bid of $40 million in cash, everything outstanding under the debtor-in-possession financing agreement, everything outstanding under the General Electric Capital Corp. facility, administrative expenses of up to $18.5 million, the $3.3 million break-up fee, the assumption of certain liabilities and an initial over-bid of $500,000. Subsequent bids must be in $250,000 increments.

The sale hearing is scheduled for Oct. 26.

Galey & Lord, an Atlanta-based textile company, filed for bankruptcy on Aug. 19. Its Chapter 11 case number is 04-43098.

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