Hartmarx amends asset sale agreement to increase purchase price

By Caroline Salls

Pittsburgh, Aug. 6 - Hartmarx Corp. has entered into a first amendment to the purchase agreement with Emerisque Brands UK Ltd. and SKNL North America, BV to increase the purchase price for the sale of substantially all of Hartmarx's assets, according to an 8-K filed with the Securities and Exchange Commission.

Specifically, the purchase price was increased to an amount equal to the balance of the outstanding obligations under the company's $160 million debtor-in-possession facility from Wachovia Capital Finance Corp. on the business day immediately preceding the closing of the sale.

The amendment also increases the amount of liabilities to be assumed by the buyers and provides for the payment of $335,000 to Hartmarx to assist with the administration and wind down of its bankruptcy estates following the sale closing.

According to the amended purchase agreement, the pre-closing DIP loan balance will be paid through a combination of the proceeds of equity invested by the buyers and borrowings under a new credit facility that will include a $10 million secured promissory note.

As previously reported, Hartmarx received court approval in June to name Emerisque and its partner SKNL North America as the stalking horse bidder.

The original stalking horse bid had a total transaction value of $128.4 million.

Hartmarx, a Chicago-based producer and marketer of business, casual and golf apparel, filed for bankruptcy on Jan. 23, 2009 in the U.S. Bankruptcy Court for the Northern District of Illinois. Its Chapter 11 case number is 09-02046.

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