Lenox details winning asset sale offer

By Caroline Salls

Pittsburgh, March 3 - Lenox Group, Inc. provided details of the winning bid for the sale of its assets, submitted by LDG-Delaware Opco, Inc., in an 8-K filed Tuesday with the Securities and Exchange Commission.

LDG is controlled by Lenox term loan lenders, including Clarion Capital Partners, LLC.

As previously reported, Lenox named Upstairs Acquisition Corp. the high bidder following an auction held Feb. 11.

However, the U.S. Bankruptcy Court for the Southern District of New York exercised its right to reopen the auction at last week's sale hearing. The court ruled that the bid previously submitted by LDG-Delaware would be a qualified bid at the reopened auction.

Lenox declared LDG's bid the highest and best offer at the reopened auction, and Upstairs Acquisition declined to submit a further offer, according to the 8-K.

Under the terms of the LDG asset purchase agreement, LDG will purchase substantially all of Lenox's assets for a consideration including $44.5 million of debt forgiveness, the assumption by LDG of specified liabilities, cash equal to the outstanding obligations under Lenox's debtor-in-possession credit facility and cash equal to the sum of $2.15 million to pay allowed administrative, priority and secured tax claims, accrued professional fees, $250,000 for distributions to general unsecured creditors and $100,000 to fund the costs and expenses of a plan administrator to wind down Lenox's estates after the sale closing date.

LDG has also agreed to offer jobs to Lenox employees who are still with the company immediately before the sale closing date.

LDG will pay those employees compensation and benefits that were being paid before the closing date for one year, but it will not be required to provide equity-based benefits, defined benefit pension benefits, retiree medical or life insurance benefits or incentive or bonus plans.

Closing is subject to final court approval, clearance from the German Federal Cartel Office and other customary closing conditions, including the consent of certain third parties to the assumption and assignment of specified contracts.

According to the 8-K, Upstairs Acquisition had offered to pay $42.5 million in cash for the Lenox assets, plus cure costs and assumption of liabilities. That asset purchase agreement was terminated, and Lenox will not incur any termination penalty.

Eden Prairie, Minn.-based Lenox is a maker of tableware, collectibles and giftware. It filed for Chapter 11 bankruptcy protection on Nov. 23, and its Chapter 11 case number is 08-14679.

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