Not enough money has been raised in sales of businesses controlled by Lynn Tilton to lock in an extended peace pact with backers of her Zohar collateralized loan obligation funds, according to a lawyer for the bankrupt investment vehicles, WSJ Pro Bankruptcy reported. Only one company out of a dozen that were marketed has reached a deal, Zohar funds attorney Michel Nestor said at a Friday hearing in the U.S. Bankruptcy Court in Wilmington, Del. The sale of Denali Inc., a maker of industrial storage tanks with plants in California, Oklahoma and Pennsylvania, is up for court approval next week. The Zohar funds, which Tilton placed under bankruptcy protection last year, would get between $72 million and $78 million from the Denali sale, according to court papers. But Zohar investors are owed more than $1.8 billion they put up years before to help Tilton, a turnaround executive, rescue distressed businesses.
Rhode Island Suburban Newspapers (RISN) Inc. has proposed buying The Union Democrat newspaper and building for $1.15 million, The Union Democrat reported. The real estate accounts for $500,000 of the proposed purchase price, according to a notice filed in bankruptcy court. RISN was set up in December 2006 and bought the Journal Register Co.’s three daily newspapers and a group of weekly newspapers for $8.3 million in 2007. Competing bids for The Union Democrat are due by July 11 and must exceed the Rhode Island Suburban Newspapers proposal by at least $50,000, according to the notice. A hearing is scheduled for July 29.
The new owner of the Reading Eagle plans to retain more than half of Reading Eagle Company's (REC) employees, the Reading Eagle reported. Denver-based MediaNews Group, which is buying the company for $5 million, made offers of employment to 125 employees, and 111 accepted the offers, Reading Eagle company officials said Thursday. As of June 13, REC had 195 employees, officials said. When the company filed for bankruptcy in March it had 236 full-time and 20 part-time employees. The employees who did not receive offers from MNG and those who rejected offers will likely be laid off by REC when the sale is finalized — scheduled for June 30 — unless they voluntarily retire or resign before then, officials said. A Worker Adjustment Retraining Notification, or WARN, notice filed with the state Department of Labor and Industry indicated 81 employees will be laid off, but company officials said that number now is 84. If any other changes occur, a final WARN notice will be filed prior to closing. The company filed for Chapter 11 protection March 20, citing an untenable financial situation and a large amount of debt. MNG, which also does business as Digital First Media, was the lone qualified bidder. A bankruptcy judge on May 22 approved the sale.
Ditech Holding Corp., which filed for bankruptcy in February, said on Tuesday that it reached two separate deals with buyers for its forward and reverse mortgage servicing and originations businesses, the Wall Street Journal reported. Publicly traded real-estate investment trust New Residential Investment Corp. will acquire assets of Ditech’s forward mortgage servicing and originations business Ditech Finance LLC, while Mortgage Assets Management LLC will buy the stock and assets of the company’s reverse mortgage business, Reverse Mortgage Solutions Inc. New Residential’s offer will be designated as a stalking-horse bid, and each of the two agreements are subject to higher and better offers. The deadline for submitting competing bids is July 8 and a confirmation hearing is scheduled for Aug. 7. The Fort Washington, Pa.-based company planned to sell its assets since the start of its chapter 11 proceeding, and the company has also negotiated a deal with lenders to forgive more than $800 million in debt.
Ascena Retail Group Inc., the company behind Ann Taylor and Loft stores, has hired liquidation firm Gordon Brothers to help conduct going-out-of-business sales at the Dressbarn chain, the Wall Street Journal reported. In May, Ascena said that it would shut down all 650 Dressbarn stores and had hired real estate advisory firm A&G Realty Partners to help with the closures. Ascena is in the early stages of shutting down Dressbarn, a process the company expects to complete by year’s end, Chief Executive Gary Muto said during the company’s quarterly earnings call on Monday. In May, Ascena sold Maurices, which sells moderately priced women’s apparel, to private-equity firm OpCapita. With the sale of Maurices and the shutdown of Dressbarn, Ascena will have exited the value fashion segment of its business.
A bankruptcy trustee on Monday accepted bids on several of the former Magnetation and ERP Iron Ore facilities, providing a timeline on when the bankruptcy-burdened sites might finally have a new owner, the Duluth (Minn.) News Tribune reported. In federal bankruptcy court, the trustee approved Prairie River Minerals’ $1.95 million bid to purchase Plant 1 in Keewatin and the Jessie Load-Out facility near Grand Rapids, Minn., while also approving a $1.7 million bid by MJM Minerals for Plant 2 near Bovey. The trustee, Nauni Manty, recommended Prairie River Mineral's bids in a motion to sale filed last month. A judge will consider the motion for the sale on June 19, and the sale will then close 30 days later. Two other companies — Bison Minerals and Buckeye Minerals — also expressed interest in Plant 4 outside Grand Rapids, but trustee Nauni Manty wrote in a status report filed Monday that other interested companies would be working with the site’s mechanic’s lien holders and Itasca County before filing an offer by June 28. Under Magnetation, Plants 1, 2 and 4 and the Jessie Load-out facility employed more than 500 people at its peak in 2014, but closed shortly after and filed for chapter 11 bankruptcy in 2015 as iron ore prices plummeted.
The parent company of Sears and Kmart stores, controlled by former Sears Holdings Corp. Chief Executive Eddie Lampert, has agreed to buy the rest of Sears Hometown and Outlet Stores Inc.’s shares outstanding that Lampert’s hedge fund doesn’t already own, the Wall Street Journal reported. Transform Holdco LLC is buying the rest of Sears — or 42 percent of the company — for $2.25 a share in cash. The companies said that the deal brings Sears Hometown and Sears and Kmart stores back together after Sears Hometown stores were spun off from Sears Holdings Corp. seven years earlier. Transform’s majority owners are ESL Investments Inc., Lampert’s hedge fund, and its affiliates. A judge earlier this year approved a plan for Sears Holdings Corp., the former owner of Sears and Kmart stores that applied for bankruptcy last year, to sell assets to Lampert’s new company. Lampert was previously CEO of Sears Holdings.
Shutter and blind manufacturer American Home Products has filed for bankruptcy with a plan to sell most of its assets to private-equity investors, CFO.com reported. Gainesville, Ga.-based American Home, one of the largest custom shutter companies in the United States, sells under the Louver Shop and Danmer brand names. Its chapter 11 petition came just four months after it was unable to negotiate a new distribution deal with Home Depot. According to court papers, the company has more than $12.5 million in secured debt. A stalking-horse bidder identified as The Louver Shop Holdings has agreed to acquire substantially all of its assets for $8 million, consisting of a credit bid of a portion of the secured debt. The purchase agreement indicates the buyer is an affiliate of private-equity firm Squire Ridge, which specializes in investing in privately-held manufacturing companies.