Wickes asks court to set auction date
Could lead to liquidation
Clint Engel -- Furniture Today, February 6, 2008
WHEELING, Ill. — Wickes Furniture has asked U. S. Bankruptcy Court for an auction of its assets later this month — a move it said that could lead to total liquidation, the sale of some or all of the chain as a going concern, or a refinancing or equity investment to support a reorganization.
The Top 100 company, which filed for Chapter 11 bankruptcy protection Sunday, has asked the Delaware court to approve a schedule that calls for bids to be submitted by Feb. 22, an auction on or before Feb. 25 and a sale hearing Feb. 28, according to a court documents.
It is also asking the court to authorize the company to offer a break-up fee of up to 3% of the purchase price offered by a stalking horse bidder.
Meanwhile, industry sources have told Furniture/Today that the 43-store retailer released most of the staff at its corporate offices here this week. Wickes President and CEO John Disa and representatives of Wickes owner Sun Capital Partners have not returned repeated calls.
While the requested auction schedule appears to suggest the company will liquidate in some form, court documents show the retailer still holds out hope for some kind of reorganization.
Wickes said in a document that with approval of an auction, it will solicit bids for liquidation, sale of assets as a going concern or “a potential refinancing or equity investment in the debtor in support of a plan of reorganization.”
The auction plan is tied to the $30 million debtor-in-possession financing arrangement that Wickes has with Wells Fargo Retail Finance.
In court documents, Wickes said it has “experienced significant operational losses over the last year,” attributing them to several factors from the declining housing market to gas prices to home foreclosures. It said the losses have been funded by increased borrowing on its revolving credit facility and term loans.
According to documents, Wickes has some seven loans with outstanding due amounts of nearly $80 million at the time of ifs bankruptcy filing.
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