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Versa, which specializes in distressed investments, would pay an
undisclosed amount of cash for Aeropostale's inventory and take
on over 500 of the chain's leases, located mostly in malls
across the United States, according to the filing made late on
Thursday.
Versa's offer would be a potential stalking horse bid in a
bankruptcy auction for the retailer scheduled for later this
month, setting the minimum price for other potential buyers.
Other bids are due Aug. 18.
Spokespeople for Aeropostale and Versa declined to comment.
Aeropostale is currently ensnared in a legal battle with one of
its lenders, private equity firm Sycamore Partners, creating
uncertainty in the auction process.
The retailer claims Sycamore pushed it into bankruptcy and has
asked a U.S. bankruptcy court judge to bar the private equity
firm from using the money it is owed to bid. Aeropostale is also
asking that the judge reduce how much Sycamore would be repaid
on its $150 million loan.
The matter is scheduled to go to trial later this month.
Because of the uncertainty, Versa will not advance negotiations
unless Aeropostale reimburses the firm for the expenses it
incurs in its work on the potential bid, according to the
filing. The retailer is asking a U.S. bankruptcy judge for
permission to pay Versa up to $500,000 of its expenses.
Because the deal would keep Aeropostale's U.S. operations up and
running, it would help boost the value of the retailer's
international business and intellectual property, the filing
states.
Close to 10 teen apparel retailers including Aeropostale have
filed for bankruptcy over the past two years amid fierce
competition and stagnating sales.
Versa bought another mall-based teen retailer, The Wet Seal Inc,
out of bankruptcy last year.
(Reporting by Jessica DiNapoli; Editing by Leslie Adler)
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