Tags: recovery | Brookstone | malls | creditor

Brookstone Wins Approval for Creditor Vote on Recovery Plan

Monday, 19 May 2014 12:01 PM

Brookstone Inc., the luxury-gadget retailer that sells $4,600 massage chairs, won bankruptcy court permission to seek creditors’ votes on a plan to repay creditors that will be funded by selling its assets.

U.S. Bankruptcy Judge Brendan Linehan Shannon today approved the company’s disclosure statement, an explanation of the restructuring plan, saying at a hearing in Wilmington, Delaware, that it contains “adequate information” for creditors to make an informed decision.

Brookstone, based in Merrimack, New Hampshire, filed for bankruptcy April 3 with a deal to sell its assets to Spencer Spirit Holdings Inc. for about $146 million. Brookstone has struggled to adapt to a retail landscape where online competitors dominate and consumers are cutting back on non-essentials.

Spencer, a novelty retailer, will kick off a June 2 auction with an offer of $120 million in cash, $7.5 million in new notes and the assumption of about $18.5 million in liabilities.

Brookstone is “optimistic that there will be an auction on June 2,” said Mackenzie L. Shea, a lawyer for the company, indicating Spencer’s bid may be challenged. Bids are due May 28.

The company will seek court approval of the sale and its plan at a hearing set for June 23, according to court documents.

The company obtained support for its plan from a majority of noteholders before seeking bankruptcy. Unsecured creditors backed the plan after striking a deal that would give them at least $1.25 million and as much as $1.5 million if the company receives a higher bid at the auction.

Brookstone started as a catalog business in 1965, offering “hard-to-find tools” before opening its first store in 1973 in Peterborough, New Hampshire, according to its website. Most of its 242 locations in the U.S. and Puerto Rico are in malls.

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Brookstone Inc., the luxury-gadget retailer that sells $4,600 massage chairs, won bankruptcy court permission to seek creditors' votes on a plan to repay creditors that will be funded by selling its assets.
recovery, Brookstone, malls, creditor
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2014-01-19
Monday, 19 May 2014 12:01 PM
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