April 13, 2020 – The Court hearing the Ample Hills Holdings cases issued an order (i) approving proposed bidding procedures, including stalking horse bidder protections (combined break-up fee and expenses capped at 3%), (ii) authorizing the selection of a stalking horse and (iii) approving an auction/sale timetable culminating in an auction on June 11th and a sale hearing on June 30th [Docket No. 91].
In an omnibus reply to objections (including in respect of the Debtors' bidding procedures motion) [Docket No. 73], the Debtors provided the following update on the status of current marketing/sales efforts: "To date, the Debtors have generated a substantial level of interest with respect to the anticipated sale of their assets under section 363 of the Bankruptcy Code, despite the ongoing global health and economic crisis caused by the coronavirus (COVID-19) pandemic (the 'Coronavirus Pandemic'), and despite the state-imposed 'shelter-in-place' laws and other restrictions and regulatory measures taken by the federal, state, and local government authorities, including the mandatory closure of non-essential retail and other businesses. The highlights are that the Debtors’ Chief Restructuring Officer (the 'CRO') has contacted 138 potential purchasers, 18 parties have signed non-disclosure agreements, and each of those 18 parties has started and continues to conduct due diligence in the digital data room set up for prospective purchasers. The Debtors hope and expect that additional parties will express interest after the bidding procedures are approved. According to the Debtors’ CRO, potential buyers have confirmed the Debtors’ initial judgment that the Debtors’ brand is strong and that a going concern sale will result in the highest value possible being achieved."
The Debtors bidding procedures motion [Docket No. 18] stated, “The Debtors’ business is the ownership and operation of ice cream shops primarily in New York. The consummation of value-maximizing, job-preserving, going-concern sales of the Debtors’ assets is the cornerstone of these Chapter 11 Cases. The Debtors, with the assistance of an investment banker, will conduct a sale process in order to identify the highest and best offer by a purchaser willing to expeditiously consummate the sale of substantially all of the Debtors’ assets free and clear of all liens, claims and encumbrances. The Debtors believe that the timely consummation of a Sale Transaction is in the best interest of the estates and their creditors."
Selection of Stalking Horse and Bidder Protections
The order provides: "Upon entry of the Bidding Procedures Order and up until ten (10) days prior to the Auction, the Debtors shall be authorized, but not obligated, in an exercise of their business judgment, to (a) select one or more Acceptable Bidder to act as a Stalking Horse Bidder in connection with the Auction and (b) in connection with any stalking horse agreement with a Stalking Horse Bidder, (x) provide a breakup fee (the 'Breakup Fee'), (y) agree to reimburse the reasonable and documented out-of-pocket fees and expenses (the 'Expense Reimbursement') and/or (z) agree to pay a 'work fee' or other similar cash fee (the 'Work Fee' and together with the Breakup Fee and the Expense Reimbursement, the 'Bid Protections'). The aggregate amount that may be paid to any or all stalking horse bidders on account of (x) – (z) shall not exceed three percent (3%) of the proposed Purchase Price. The Bid Protections will be paid only in the event that the Stalking Horse Bidder is not the Successful Bidder. If the Debtors or the Stalking Horse Bidder are not able to consummate a Transaction for any reason, no Bid Protections will be paid."
Key Dates
- Bid Deadline: June 5, 2020
- Notice of Auction to Qualified Bidders: June 9, 2020
- Auction: June 11, 2020
- Deadline to Notify Court of Successful Bidder: June 12, 2020
- Sale Objection Deadline: Sale Objection Deadline
- Sale Hearing: June 30, 2020
About the Debtors
According to the Debtors: "Ample Hills Creamery was founded in the spring of 2011 by married couple, Brian Smith and Jackie Cuscuna. Novice entrepreneurs and new parents, Brian and Jackie spent their days juggling the responsibilities of running a business and raising two kids. When they opened their first scoop shop, they were terrified no one would show up…and wildly unprepared when they did. In just four days, Brian and Jackie sold out of ice cream. They hadn’t prepared to be so popular; to churn enough ice cream for the never-ending line, they had to close. While Ample Hills has grown a lot since those days, Brian and Jackie are still balancing it all: imagining new flavors, managing the day-to-day and taking care of their children. With their boundless creativity and inexhaustible passion for dessert, we’re lucky to have Brian and Jackie steering the ship. Just like day one."
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