Big M sale procedures, YM stalking-horse protections approved by court

By Jim Witters

Wilmington, Del., April 15 - Big M, Inc. received approval of bidding procedures for the sale of substantially all of the company's assets and for stalking-horse protections for potential buyer YM, Inc., according to documents filed April 15 with the U.S. Bankruptcy Court for the District of New Jersey.

As previously reported, the company and YM came to terms April 5 on a $22.5 million asset purchase agreement.

Sale terms

Under the asset purchase agreement, YM will pay $5 million for assets other than inventory, in-transit inventory or pre-paid inventory and a maximum of $17.5 million for inventory cash portion and pre-paid inventory.

The agreement also calls for payment of "an amount equal to security deposits" and the assumption of certain liabilities.

The court approved a 3% breakup fee and as much as $300,000 in expense reimbursement if YM does not emerge as the successful bidder.

The asset purchase agreement calls for a sale closing no later than noon ET on May 20.

Bid procedures

Under the procedures approved on April 15,

• The bid deadline is May 6;

• An auction, if needed, will be May 8;

• All bids must propose a purchase price equal to or greater than the aggregate sum of the actual cash value of the stalking-horse purchase price ($22.5 million), the dollar value of the stalking-horse protections (estimated at $975,000) and an initial overbid of $100,000;

• Bid increments at the auction are $100,000;

• A cash deposit of at least $1.98 million is required; and

• The sale hearing is scheduled for 10 a.m. ET on May 15.

Big M, a Totowa, N.J.-based women's clothing chain owner, filed for bankruptcy on Jan. 7. Its Chapter 11 case number is 13-10233.

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