January 19, 2021 – The Debtors filed a motion requesting Court authority (i) for a proposed sale of their Honolulu Property (purchase price $23.9mn) to Twenty Lake Management LLC, a Delaware limited liability company (the “Purchaser”) and (ii) to enter into a purchase agreement with the Purchaser [Docket No. 3379]. The sales contract as initially executed notes a price of $24.1mn with this sum being adjusted in an amendment to reflect a $200k credit granted by the Debtors to the purchaser (the contract and amendment are at Docket No. 3379.2).
Marketing Process
The Debtors' requesting motion states, “Following the sale of the Hayward Property, the Honolulu Property is the Debtors’ largest and most valuable remaining unsold asset. With the assistance of Cushman & Wakefield PLC (‘Cushman’) and their other advisors, the Debtors began the remarketing process for the Honolulu Property immediately following confirmation that the IRG Sale Transaction would not be consummated. Because the Honolulu Property had already been included in the original sale process described in the Sale Motion and approved pursuant to the Bidding Procedures Order, the marketing process for the Honolulu Property was well-progressed, with nearly 200 potentially interested parties receiving contact from the Debtors’ advisors through April 2020.
However, in light of the COVID-19 pandemic and related macroeconomic disruptions, the Debtors and their advisors determined that an expedient sale might not ensure realization of the greatest value possible for the Honolulu Property, and spent the next months pursuing the re-marketing process for the Honolulu Property on a stand-alone basis, including by making contact with thousands of potentially interested parties through Cushman’s extensive network to solicit interest and monitor market developments. The Debtors eventually received five offers for the entire property, on both a formal and informal basis, in additional to less attractive offers for just portions of the property. Following the review of these initial offers by the Debtors and their advisors, as well as the advisors to the Committee, and further discussion with selected bidders, the Debtors (in consultation with the Committee) narrowed the list of bidders and, in late October 2020, invited three of them to submit best and final offers (each a ‘Final Offer’).
The Debtors received Final Offers from two of those parties and, after careful review of the Final Offers by the Debtors and their advisors, as well as the advisors to the Committee, the Debtors (in consultation with the Committee) determined that the Final Offer submitted by the Buyer for a total consideration of $23.9 million (the ‘Purchase Price’) is the highest and otherwise best offer between the Final Offers.”
Proposed Key Terms of the Sale Contract:
- Seller: Southern Foods Group, LLC
- Purchaser: Twenty Lake Management LLC
- Purchase Price: $23.9mn
- Property: The parcels of land located in Honolulu, HI, having the following street addresses: (i) 1302 Elm Street, (ii) 925 Cedar Street, and (iii) 824-826 Sheridan Street, which are legally described on Exhibit A (the “Land”).
A hearing on the motion is scheduled for February 23, 2021.
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