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| US court clears S Kumars, partners' bid for Hartmax Corp |
| Press Trust of India / Chicago Jun 03, 2009, 11:47 IST |
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A US bankruptcy court today approved a raised bid from Emerisque Brands and its partner Indian apparel maker S Kumars Nationwide Ltd to acquire Hartmarx Corp, making way for the sale of the Chicago-based maker of President Barack Obama's suits.
A US judge here designated Emerisque and SKNL North America as the stalking horse bidder, implying that their offer would be accepted if no higher bids emerge.
An Emerisque statement said last minute negotiations over the weekend led to the purchasers, the company as well as its lenders agreeing to a total transaction value of $128.4 million for the acquisition of substantially all of assets of Hartmarx Corp and assumption of certain liabilities.
"The joint offer was the only bid that committed to keeping the business whole and operating... We believe this is in the best interest of the company's customers, vendors, employees and communities at this crucial juncture in the future of the company...," the statement sai.
SKNL North America, an arm of S Kumars Nationwide, along with London-based private equity player Emerisque, had offered to buy the bankrupt Hartmarx in a deal worth $119 million.
However the deal had hit a roadblock when lead lender to Hartmarx, Wells Fargo opposed the joint bid saying a $119 million offer was too low and did not provide "adequate value" to the suit maker's lenders.
Hartmarx and its 50 wholly-owned US subsidiaries filed for bankruptcy protection in January.
"There is a difficult road ahead to accomplish the turnaround and enable Hartmarx to return to growth. We look forward to an expeditious and orderly auction process, and to working productively with all of the company's stakeholders to bring this transaction to a speedy conclusion," Emerisque said.
The suit maker attracted attention when Obama wore a tuxedo, topcoat and suit tailored by it on his inauguration on January 20.
The company had entered into a "stalking horse" asset purchase agreement with Emerisque and SKNL North America.
A stalking horse bid is an attempt by a debtor to maximise the value of its assets as part of or before a bankruptcy court-approved auction process.
Responding to Wells Fargo's opposition, Emerisque had said it "vehemently object(s) to the blatant distortion of the facts" occurring so late in the process to reach an agreement.
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