Perfumania Holdings filed with the U.S. Bankruptcy Court a motion for interim and final orders authorizing the Debtors to assume an agency agreement; to sell certain assets through store closing sales; authorizing customary bonuses to employees at closing business locations; waiving compliance with contractual store closing sale restrictions and authorizing the Debtors to abandon certain unsold property. The Company solicited bids from four national liquidation firms: Hilco Merchant Resources, Great American Group, Gordon Brothers Retail Partners and Tiger Capital Group.
The motion explains, “As a guaranty of the Agent’s performance under the Agency Agreement, in addition to payment of the Expenses, Agent will guarantee that the Merchant shall receive 68.3% (the ‘Guaranty Percentage’) of the aggregate Cost Value of the Merchandise (the ‘Guaranteed Amount’), subject to certain inventory level and cost factor adjustments. The Guaranty Percentage has been fixed based upon the aggregate Cost Value of the Merchandise included in the Sale being not less than $4,500,000 and not more than $4,700,000 (the ‘Merchandise Threshold’) as of the Sale Commencement Date and the Cost Factor Threshold being equal to 29.6%. Sale of FF&E Agent shall sell all FF&E at the Stores owned by Merchant pursuant to a commission structure whereby Agent shall be entitled to receive a commission equal to 17.5% of the gross proceeds (net only of sales taxes) from the sale of any FF&E.”
In addition, “The Agent may, in its discretion, extend the Sale Termination Date to no later than October 31, 2017 at up to 15 Stores upon not less than 8 days’ prior written notice before the initial Sale Termination Date. Agent Compensation After Proceeds are used to repay Agent for amounts paid on account of the Guaranteed Amount and to pay Expenses, all remaining Proceeds shall be allocated in the following order of priority: First, to Agent in an amount equal to 5% of the aggregate Cost Value of the Merchandise (‘Agent’s Fee’); and thereafter 50% to Agent and 50% to Merchant (‘Sharing Amount’). The Sale commenced on August 25, 2017 and shall conclude at each Store no later than September 30, 2017.”
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