Frederick’s of Hollywood Inc. received bankruptcy-court approval Wednesday to move forward with a $22.5 million offer that would keep the iconic brand alive, the Wall Street Journal reported today. A bankruptcy judge signed off on the company’s proposed protections for the offer from Authentic Brands Group Inc., which will be tested at auction on May 28 should competing offers emerge. Bankruptcy Judge Kevin Gross said at a hearing yesterday that the bid rules proposed by Frederick’s are “perfectly adequate” and “possibly in a form that would create some competitive bidding.” The offer from Authentic Brands is for Frederick’s intellectual property, some inventory and its e-commerce business, since the company entered bankruptcy having shut down its remaining store locations. The protections for that bid include a $775,000 termination fee, negotiated down from $850,000 with the committee representing unsecured creditors, and $300,000 in expense reimbursement.
