J & M Sales – Court Approves Stipulation with Hilco Merchant Resources

October 23, 2018 – The Court hearing the J & M Sales case approved a stipulation [Docket No. 691] regarding amounts owed by the Debtors  to Hilco Merchant Resources (“HMR”) under bid protection terms contained in a bidding procedures order [Docket No. 521]. HMR had served as a stalking horse bidder, including as to assets ultimately sold to Pegasus Trucking and had argued that it was entitled to a $1,062,500 payment in respect of that asset sale. The order states, “At the Sale Hearing, the Debtors, HMR and other parties in interest agreed to adjourn the issue of payment of the Bidding Protections to HMR; and the Debtors and HMR have resolved disputes in respect of the Bidding. NOW THEREFORE, the Debtors and HMR stipulate and agree as follows: 

1. If the Going Concern Transaction closes, HMR is entitled to receive $750,000 (the ‘Revised Bidding Protections’) in full and final satisfaction of the Bidding Protections as approved by the Bidding Procedures Order and as set forth herein; 

2. The Revised Bidding Protections shall be paid solely from the proceeds of the sale of Owned FF&E (as defined in the Initial Agency Agreement) (the ‘Owned FF&E Proceeds’), which the Agent is authorized to sell on the Debtors’ behalf under the Liquidation Sale Order and Initial Agency Agreement 

3. The Owned FF&E Proceeds shall be distributed as follows: a. First, to the Agent to reimburse the Agent for any costs or expenses related to the sale of Owned FF&E under Section 7.1 of the Initial Agency Agreement; b. Second, to the Agent for the Agent’s fifteen percent (15%) commission under Section 7.1 of the Initial Agency Agreement; c. Third, to HMR until HMR has received an amount equal to the Revised Bidding Protections; and d. Fourth, to the Debtors.

4. If the Owned FF&E Proceeds are not sufficient to satisfy the amount equal to the Revised Bidding Protections, HMR shall not be entitled to any additional or further recovery with respect to the Revised Bidding protections, and HMR shall be deemed to waive its rights to such remaining amounts with respect to the Revised Bidding Protections. 

 

5. If the Going Concern Transaction does not close, this Stipulation shall be null and void.”