Peninsula Daily News news sources
FRESNO, Calif. — Gottschalks Inc. reported Thursday that it has a deal with a group of liquidators that will make the initial, base bid for the department store chain at auction in two weeks, and that group has been guaranteed a certain amount of the liquidating proceeds if it is the auction winner.
The Fresno-based retailer, which has a department store in downtown Port Angeles, filed for Chapter 11 bankruptcy protection Jan. 14, after continuing losses and declining revenue in recent years.
Gottschalks last week received court approval to extend the auction by two weeks after receiving bids from “multiple potential buyers.” The auction is now expected to be held on or before March 30.
The joint liquidation venture will be made up of SB Capital Group LLC, Tiger Capital Group LLC, Great American Group LLC and Hudson Capital Partners LLC. Gottschalks said it entered into an agreement with the group on March 9.
That group will serve as a “stalking horse” bidder, and will receive all or most of Gottschalks’ assets if there isn’t a higher bidder, Gottschalks said in a filing with the U.S. Securities and Exchange Commission.
As agreed, the group of liquidators would sell merchandise at Gottschalks 58 stores and its distribution center and various furnishings and fixtures at a sale that would start on or about April 3 and would finish at least by July 15.
The group of liquidators is guaranteed to receive 85 percent of the aggregate cost value of the merchandise to be sold, no matter the amount of actual sale proceeds, plus money to cover sale expenses, according to the SEC filing.
If the total proceeds from the sale exceed the guaranteed amount, the group would keep the balance of the sale proceeds, up to 4 percent of the aggregate cost value of the merchandise. Any remaining sale proceeds exceeding the guaranteed amount and the joint venture group’s fee would be shared equally between Gottschalks and the group. The liquidators would keep all unsold merchandise.
