Pacific Sunwear of California filed with the U.S. Bankruptcy Court a motion to approve bidding procedures, scheduling the bid deadline and auction and granting related relief. Term loan lender Golden Gate Capital will serve as the stalking horse purchasers for substantially all of the Debtors’ assets on the terms and as provided for in the Joint Plan of Reorganization, acknowledging that the stalking horse bid will provide for payment in full in cash of all D.I.P. facility claims and ABL claims on the Plan’s effective date or closing date of the sale).
The motion explains, “The determination of which Qualified Bid constitutes the Baseline Bid and which Qualified Bid constitutes the Winning Bid…shall take into account any factors the Debtors, in consultation with the Term Loan Lenders, the DIP Agent and their respective advisors, reasonably deem relevant to the value of the Qualified Bid to their estates, including, inter alia: (a) the amount and nature of the consideration; (b) certainty of closing; (c) the net economic effect of any changes to the value to be received by each of the Debtors’ classes of claims or interests from the transaction currently set forth in the Plan, if any, contemplated by the Sale Process Documents; and (d) tax consequences of such Qualified Bid.”
The deadline to submit qualified competing bids is June 17, 2016 and an auction, if necessary, would be conducted on June 22, 2016. Each competing bid must be accompanied by a deposit in the amount equal to 10% of the bidder’s proposed purchase price in cash to an escrow account to be identified and established by the Debtors. The bidding procedures require minimum overbid increments in the amount of at least $500,000.
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