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West Virginia-based Fairmont General Hospital Inc . is preparing to hold a June 17 auction for potential buyers who want to challenge a $15.3 million offer from Alecto Healthcare Services LLC, Dow Jones Daily Bankruptcy Review reported today. In court papers filed on Friday, Fairmont laid out bidding procedures that, if approved by Judge Patrick Flatley, will name Alecto as the lead bidder for the hospital's assets. Fairmont has also asked Judge Flatley to approve protections for Alecto that would guarantee the company break-up fees and reimbursements of the lesser of $500,000 or 2.5 percent of the final purchase price should it fail to win the auction.

A Virginia investment firm is poised to purchase package-delivery company Noble Logistics Inc. out of bankruptcy after a Bankruptcy Judge Christopher S. Sontchi signed off on the $14.5 million deal on Tuesday, Dow Jones Daily Bankruptcy Review reported today. Judge Sontchi approved the bid from an affiliate of Gladstone Investment Corp. for Houston-based Noble Logistics, said Gladstone lawyer Barry Seidel of the Dickstein Shapiro law firm. Noble Logistics looked for new owners after filing for bankruptcy in February, blaming tough industry competition and a "significant" legal bill after defending the way it employs its network of 1,230 delivery people.

Women’s clothing retailer Coldwater Creek Inc. won bankruptcy court approval of an agreement with liquidators Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC to run going-out-of-business sales at its more than 370 stores starting on May 8, Bloomberg News reported today. Bankruptcy Judge Brendan Linehan Shannon yesterday approved the store-closing deal after Hilco and Gordon won a 32-hour auction, pushed by another liquidator group to substantially improve the initial offer. Hilco and Gordon guarantee a 128 percent return on costs of Coldwater’s merchandise from the sales, based on a value of $90 million to $105 million, court papers show. The liquidators’ original stalking-horse offer guaranteed a recovery of 97 percent.

Freedom Industries Inc. wants to sell its chemical-blending division as it moves to shut down following a chemical spill that contaminated the water supply of some 300,000 people in West Virginia earlier this year, Dow Jones Daily Bankruptcy Review reported today. In court papers, company officials said they found a buyer willing to pay $575,000 for its Poca Blending division, which sells — from 79 tanks — products for surface water treatment and dust suppression and de-icer to the coal and rail sector. Its largest customer is Arch Coal Inc., according to court documents.

Specialty retailer Brookstone Holdings Corp. has received bankruptcy-court approval to sell ownership of the restructured company at auction, with a $146.3 million offer from a Spencer Spirit Holdings Inc. affiliate setting the floor price, the Wall Street Journal reported today. Bankruptcy Judge Brendan Shannon on Friday approved the rules to govern the Brookstone auction, including a $3.7 million breakup fee and up to $500,000 in expense reimbursement to Spencer's if it is bested by another offer. The Spencer's offer is worth $120 million in cash plus $75 million in notes and assumption of liabilities. The auction is scheduled for June 2, and competing bids are due May 28. Those bids must be worth at least $250,000 more than the Spencer's offer and cover the cost of Spencer's breakup fee and expense reimbursement.

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.

With no other offers on the table, plus-size women's clothing retailer Ashley Stewart said on Wednesday that it plans to cancel a scheduled bankruptcy auction and sell its assets to lead bidder Clearlake Capital Group, the Wall Street Journal reported yesterday. Clearlake, a private-equity firm that specializes in distressed investing, offered $18 million in cash for the company last month. Depending on the value of Ashley Stewart's remaining inventory, the total purchase price could rise to as high as $23 million, according to court filings. The company planned to test Clearlake's offer at an auction this week but received no competing bids by a Tuesday deadline, according to a court filing on Wednesday. In light of that, Ashley Stewart said that it plans to present the final Clearlake sale agreement for court approval at an April 22 hearing.

Ashley Stewart and Quantum Foods will each place their assets on the auction block on Thursday, the Wall Street Journal reported on Saturday. Retailer Ashley Stewart Holdings Inc.’s auction will be led by private equity firm Clearlake Capital Group, which is offering $18 million in cash, subject to an inventory adjustment. The quick sale timeline is important, the company said, to assure others that Ashley Stewart isn’t going down the same path as other retailers that have liquidated recently. Separately, Quantum Foods LLC is going to auction on Thursday with an offer from Oaktree Capital. Oaktree’s bid consists of $54 million in cash and $30.3 million in assumed liabilities.

Calumet Photographic Inc., the photography retail chain whose abrupt shuttering and bankruptcy filing surprised customers, has found a buyer for some of its assets, the Wall Street Journal reported today. According to court papers filed yesterday in Calumet’s bankruptcy case, CalPhotoUS LLC — a new company formed by Calumet’s former principals — is offering $2.825 million to acquire inventory, store leases and other assets. The inventory and leases are for former Calumet stores in such cities as Chicago, San Francisco and Washington, D.C. CalPhoto would also take responsibility for any liabilities related to the leases as well as the stores’ former employees and customers.

Sbarro Inc., the 800-restaurant U.S. pizza chain in bankruptcy, has seen signs of interest from 31 potential bidders ahead of an auction for which it seeks initial offers by April 14, Bloomberg News reported yesterday. Of 114 possible buyers contacted, 31 signed confidentiality agreements to learn more about Sbarro, Adam Keil, a managing director at investment bank Moelis & Co., said in an April 4 in court filing. Sbarro’s secured lenders already have a proposal to buy the company under a reorganization plan that provides for an auction to test the market for higher bids. The plan has support of holders of 98 percent of secured lender claims, Keil said. The winning bidder must pay the company’s bankruptcy loans in full and offer more than $500,000 more than the $35 million credit bid made by the secured lenders.