Illinois-based private equity firm Middleton Partners has agreed to pay $39 million for Maurice Sporting Goods (MSG), which filed Chapter 11 bankruptcy in Delaware last week. MSG has outstanding secured and unsecured debts of more than $100 million—including a trade debt of $50 million.
Last week, MSG announced that they had reached a stalking horse agreement to sell to Middleton Partners. A stalking horse bid is an initial bid on a bankrupt company’s assets from a company chosen by the bankrupt entity. For now, the sale is not final, but the lowball price is set for Maurice. Future bidders must submit a proposal at least $1.5 million higher than Middleton’s offer to be considered.
Should the deal fall through, Middleton Partners will be owed $500,000 as a “breakup fee” by MSG.
According to SGB Media, A motion filed in U.S. Bankruptcy Court District of Delaware (case 17-12481) on Nov. 27 proposed the following timeline for the sale of MSG.
- Deadline for Sale Procedures: November 30, 2017 at 4:00 p.m. (ET)
- Sale Procedures Hearing Date: December 5, 2017 at 2:00 p.m. (ET)
- Cure Amount Objection Deadline: December 15, 2017 at 4:00 p.m. (ET)
- Sale Objection Deadline: December 15, 2017 at 4:00 p.m. (ET)
- Sale Hearing Date: December 20, 2017 at 10:00 a.m. (ET)
Court filings obtained by FTR last week list Normark, Shimano North America, Gary Yamamoto Custom Baits, and Panther-Martin among tackle manufacturers owed in excess of $800,000 by MSG. Yamamoto is one of at least two companies with open lawsuits against MSG for unpaid debts. Should MSG sell for substantially less than the amount of debt owed, manufacturers are likely to left receiving pennies on the dollar for their delinquent accounts.