The inventory and intellectual property assets of Coldwater Direct, LLC, CWC Direct Parent LLC, CWC Direct LLC and CWC Stores LLC (collectively, the "CWC Companies") will be sold later this month in connection with an Assignment for the Benefit of Creditors proceeding.
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The CWC Companies operated a multi-channel retailer offering merchandise through retail stores across the country and an e-commerce website operating under the "Coldwater Creek" brand name.
On July 24, 2020 (the "Petition Date"), the "Assignee" 1 filed its Verified Petition for Assignment for the Benefit of Creditors of the CWC Companies (the "Petition"), attaching the General Assignment for the Benefit of Creditors. A true and correct copy of the General Assignment can be found at www.dsiassignments.biz/Cases/126.
On July 31, 2020, the Delaware Court of Chancery entered the Order on Petition for Assignment for the Benefit of Creditors, asserting jurisdiction over the Petition pursuant to 10 Del. C. §§7381, et seq. (the "ABC Proceeding").
The Assignee will sell all of the CWC Companies’ right, title and interest in their intellectual property, inventory assets, blocks, fitting forms and pattern, catalogue library, fabric library, patterns library and "best sellers" library and other assets (collectively, the "Assets") in connection with the ABC Proceeding.
Based upon information obtained by the Assignee, certain creditors have asserted liens, claims and encumbrances on the Assets, all of which are being reviewed by the Assignee and its counsel.
The Assignee filed a Motion to Approve (I) Procedures for Asset Sales; (II) Distribution of Proceeds and (III) Related Relief on August 7, 2020 (the "Motion").
On or about August 7, 2020, Assignee and Newtimes Development Limited ("Newtimes") executed a term sheet outlining the terms and conditions under which Newtimes will act as the "stalking horse" bidder to purchase the Purchased Assets for a purchase price of $8 million (the "Term Sheet").
The Assignee intends to sell the Assets to Newtimes subject to an overbid and auction process to be conducted by the Assignee pursuant to the above Motion and subject to execution of an acceptable Asset Purchase Agreement that embodies the conditions agreed to in the Term Sheet. In connection with the sale of the Assets, the Assignee will obtain any necessary releases of Asserted Liens on the Assets that the Assignee determines to be valid.
The Assets are being offered for sale at auction (i) as a single lot with an initial bid of $8,000,000 plus an initial overbid amount of $100,000; (ii) as two lots consisting of the (1) Intellectual Property and Intellectual Property Related Assets (the "IP Lot") with an initial bid of $7,500,000 plus an initial overbid of $100,000 and (2) the Inventory and Inventory Related Assets (the "Inventory Lot") with the initial bid of $500,000 plus an initial overbid of $50,000.
In the event that the Assignee and Newtimes are unable to execute the Asset Purchase Agreement, the Assignee will pursue an alternative "stalking horse" bid or proceed with the auction with no stalking horse bid.
Should other qualified bidders wish to bid on the Assets, they should contact the Assignee as soon as possible. Qualified bids must be submitted to the Assignee no later than 4:00 p.m., Eastern Time on August 24, 2020. Other than as expressly set forth in the Asset Purchase Agreement, all of the Assets will be sold at the auction on an "as is, where is" basis without representation or warranties. In the event that the Assignee receives a qualified bid or bids with an aggregate purchase price of at least $8,100,000, the Assignee will conduct an auction. The Assignee will use its business judgment to determine the highest and best offer. A qualified bid will need to include a purchase price in the amount of the minimum overbid for the assets to be acquired and a deposit in the amount of ten (10%) present of the purchase price to held in accordance with the terms set forth in the Term Sheet.
The Assignee is represented by Klehr Harrison Harvey Branzburg LLP; Richard Beck (RBeck@klehr.com (302)552-5501), Domenic Pacitti (DPacitti@klehr.com (302)552-5511) or Michael Rittinger (MRittinger@Klehr.com (215) 569-3399).
Development Specialists, Inc. (DSI) is one of the leading providers of management consulting and financial advisory services, including turnaround consulting, financial restructuring, litigation support, fiduciary services and forensic accounting. Our clients include business owners, private-equity investors, corporate boards, financial institutions, secured lenders, bondholders and unsecured creditors. For over 40 years, DSI has been guided by a single objective: maximizing value for all stakeholders. With our highly skilled and diverse team of professionals, offices in the U.S. and international affiliates and an unparalleled range of experience, DSI has built a solid reputation as an industry leader.
1 CW ABC LLC, a Delaware Series LLC is the Assignee for the benefit of creditors in this matter.
(312) 263-4141 ext. 1231