Court sets Levitz sale process and auction rules
The court approved bidding procedures for Levitz’s asset sale, putting the Chapter 11 case on a fast sale track rather than a free-form liquidation. The bidding procedures order covered retail locations and lease-designation rights, accounts receivable, intellectual property, intangibles, and inventory, and it expressly contemplated going-out-of-business sale structures as part of the auction evaluation.
The order set a November 26, 2007 noon ET qualified-bid deadline, a November 26 4:00 p.m. ET sale-objection deadline, a November 28 auction at Jones Day’s New York office, and a November 29 sale hearing. YA Global Investments, LP was deemed a qualified bidder and authorized to credit bid, while the debtor could offer stalking-horse protections up to 3% of proposed value. GE Capital and the official unsecured creditors’ committee received consultation rights over key sale decisions, including breakup fees, bid waivers, baseline bid selection, and the successful bid. The near-term issue for creditors is now auction value and collateral allocation, not just case stabilization.