NEW YORK: The first hearing in the bankruptcy of Barneys New York Inc started off with a bang Tuesday as the luxury retailer disclosed it had received a rescue proposal moments earlier that would compete with the tentative deal it had in place.
Lending arms of B Riley Financial Inc and Brigade Capital Management teamed up ahead of the hearing to craft an offer besting the US$75 million package Barneys had in place when it filed for bankruptcy early Tuesday, Josh Sussberg, an attorney for Barneys, said in court.
The previously announced offer came from affiliates of Hilco Global and Gordon Brothers Group.
The new proposal offers Barneys US$218 million in relief, Sussberg said.
Both proposed loan packages aim to keep Barneys open in bankruptcy while it seeks a buyer who will keep it running permanently, he said.
Bloomberg earlier reported the involvement of B Riley’s Great American Capital as a potential lender.
The court didn’t make an immediate ruling on whether to approve any of the offers. Gordon Brothers and Hilco had just learned of the new offer’s terms and may seek to revise their proposal to match or beat its terms, Sussberg said.
“We do not have a white knight as we stand here right now,” said Sussberg, of law firm Kirkland & Ellis LLP.
“We are in a full-fledged battle,” as advisers work to find a buyer who would keep Barneys alive, he said, adding “there have been more twists and turns than I can imagine.”
Preliminary plans call for closing many of Barneys stores and running a slimmed-down chain. At one point in the slide toward bankruptcy, the existing lenders had favoured shutting down the chain entirely, according to court papers.
Authentic Brands Group LLC is one party in discussions with the retailer to potentially purchase assets including the Barneys brand and trademarks.
“A company that only days ago stared down the barrel of a gun and a potential liquidation” is now the potential recipient of more than US$200 million of financing, Sussberg said.