Bluestem Brands Inc., the owner of the Fingerhut catalog, won bankruptcy-court approval to sell its assets to lenders led by Cerberus Capital Management LP, which agreed to forgive $250 million of the company’s debt, WSJ Pro Bankruptcy reported. Judge Mary Walrath of the U.S. Bankruptcy Court in Wilmington, Del., yesterday signed off on the sale of Bluestem Brands to Cerberus. The purchase price took the form of a credit bid, meaning the lenders led by the private-equity firm canceled some of the Bluestem debt they were owed. Approval of the sale comes about two weeks after Cerberus had slashed its initial $300 million credit bid to $200 million. The firm on Monday raised the credit bid to $250 million. Bluestem Brands, of Eden Prairie, Minn., sells merchandise through catalogs and e-commerce sites under such brands as Fingerhut, Gettington, Appleseed’s, Draper’s & Damon’s, and Blair. A key part of Bluestem Brands’ business is providing credit to customers — via installment plans and credit cards — who don’t have access to the usual sources of credit. The sale was complicated by the concerns of the company’s parent and largest unsecured creditor, Bluestem Group Inc. Bluestem Group, which is backed by Centerbridge Partners LP, has been at odds with its subsidiary ever since lenders led by Cerberus took control of Bluestem Brands around the time of its bankruptcy filing in March.
