SAN FRANCISCO, Nov 4 (Reuters) - Boscov’s Department Store LLC said on Tuesday it had signed an asset purchase agreement for the sale of nearly all of its assets to a family group led by Albert Boscov and Edwin Lakin.
The department store chain, which filed for bankruptcy in August, also said it had terminated a previously announced agreement with Versa Capital Management Inc.
“As we move toward the completion of our restructuring process, Boscov’s will be well-capitalized and have the resources to build a stronger and more competitive business,” said Boscov’s Chief Executive Ken Lakin in a statement.
Founded in 1911, Boscov’s is a family-owned U.S. department store chain with 39 locations on the East Coast. The company, which has been closing stores as part of its restructuring plan, had struggled to find new equity investors, and was hurt amid lower consumer spending and tightened terms by vendors in the economic downturn.
The Lakin and Boscov families “will soon be able to conclude a formal financing agreement,” the statement said, adding that the parties hope to close the transaction before the end of the month.
Albert Boscov is the uncle of Boscov’s chief executive, Ken Lakin. Edwin Lakin is his father.
A Nov. 5 hearing to authorize the Boscov’s sale was canceled and rescheduled to Nov. 13, according to court documents.
The Versa deal called for Boscov’s to sell most of its assets for $11 million in cash and the assumption of debt. According to that agreement, Versa is eligible to receive a $4 million break-up fee.
With sales of $1.25 billion in the year ended Feb. 2, Boscov’s had $538 million of assets and $479 million of liabilities as of May 3, according to court filings.
In the last year, more than a dozen other U.S. retailers have gone bankrupt, including Goody’s Family Clothing Inc, Linens ‘n Things Inc, Mervyn’s LLC and Shoe Pavilion Inc SHOEQ.PK.
Reporting by Alexandria Sage; editing by Gunna Dickson