Lenox sets asset sale bid procedures

By Caroline Salls

Pittsburgh, Dec. 2 - Lenox Group, Inc. requested court approval of the bidding procedures for the proposed sale of substantially all of the company's assets, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Lenox and its existing term loan lenders entered into a plan term sheet and plan support agreement under which the term lenders will form a new entity to purchase substantially all of the company's assets in exchange for cancellation of some of their secured loans, subject to higher or better offers.

If the lenders are ultimately the high bidders for the assets, the sale will be completed through Lenox's plan of reorganization.

According to Monday's motion, the term loan lenders' bid is comprised of $44.5 million in debt forgiveness through a credit bid, plus assumption of liabilities, cure costs payment, cash in an amount needed to pay off the company's debtor-in-possession facility and $2.15 million in cash to pay administrative, priority and secured tax claims under a confirmed plan of reorganization.

In addition, the lenders will provide an amount to be agreed upon to fund a general unsecured claim distribution pool and an amount to be agreed upon to fund the wind-down of the company's estates.

Competing bids are due by 4 p.m. ET on Feb. 9, and all bids must include a deposit of 10% of the proposed cash portion of the purchase price.

The term loan lenders' bid will be the starting bid at auction unless another qualified bid exceeds the lenders' offer by at least $50 million. Subsequent bids at auction must be for at least $1 million more than the previous bid.

The auction will be held Feb. 11.

Lenox has asked the court to schedule the bid procedures approval hearing for Dec. 15.

Lenox, an Eden Prairie, Minn.-based tableware, collectibles and giftware products company, filed for bankruptcy on Nov. 23. Its Chapter 11 case number is 08-14679.

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