NEW YORK (Reuters) – Gordon Brothers and an unspecified “group from China” are expected to make bids for the assets of bankrupt department store chain Gottschalks by Wednesday night or Thursday morning, the head of the department’s store’s creditor committee said on Wednesday.
“We’re expecting a couple of bids today which we haven’t gotten yet,” said Larry Gottlieb, a partner and the chair of the bankruptcy and restructuring practice at Cooley Godward Kronish LLP. “One is going to come from Gordon Brothers and we think there is a group from China who are seriously considering giving us a bid.”
A representative for Gottschalks was not available for comment. A representative for liquidator Gordon Brothers did not immediately return a call for comment.
Fresno, California-based Gottschalks, a regional department store chain, filed for bankruptcy protection in January after a failed deal with Everbright Development Overseas Ltd to invest up to $30 million in exchange for a stake in the company.
As of March 3, the company had operated 58 department stores and three specialty apparel stores in six western states, including California and Washington.
Gottlieb said he was unable to speculate on how much the groups may offer for the company’s assets.
“If it’s straight from Gordon Brothers, I suspect it’s a liquidation bid and it would be competing against (liquidator group) Great American,” Gottlieb said. “We’re hoping that the bid from the group in China, should it come, will be for a going concern. That’s our goal.”
A joint venture, made up of liquidators SB Capital Group LLC, Tiger Capital Group LLC, Great American Group LLC and Hudson Capital Partners LLC, has been designated by the company as a “stalking horse” bidder.
A “stalking horse” makes the lead bid at a bankruptcy auction and creates a floor for the bidding, in exchange for certain protections that often include break-up fees. If that group wins the company at auction, they are expected to begin conducting going-out-of-business sales on or around April 3.
The case is In re: Gottschalks Inc, U.S. Bankruptcy Court, District of Delaware, No. 09-10157. (Reporting by Chelsea Emery; Editing by Gary Hill)