A bankruptcy judge yesterday cleared distressed investor Clearlake Capital Group to acquire plus-size women's clothing retailer Ashley Stewart out of its chapter 11 case, the Wall Street Journal reported today. Clearlake, a Los Angeles private-equity firm, was the lead bidder for Ashley Stewart Holdings Inc.'s retail chain. But the company canceled last week's scheduled auction after no rival bidders emerged, paving the way for Clearlake to acquire the chain in a deal valued in the range of $18 million to $23 million. In addition to approving the sale, Bankruptcy Judge Michael Kaplan yesterday also signed off on a settlement that allocates the sale proceeds among Ashley Stewart's objections. Under the deal, Ashley Stewart will use the sale proceeds to pay off what the company owes under its $17.5 million bankruptcy loan. The settlement sets out a "waterfall" scheme to pay the remainder of the sale proceeds out to high-priority creditors, then the retailer's bondholders and unsecured creditors.
