STAK Design, Inc., will appear before the U.S. Bankruptcy Court for the Southern District of Texas at a hearing on May 13 to seek authority to sell its furniture, fixtures and equipment, including residual property of the estate.
STAK entered into an Asset Purchase Agreement with Spoon Exhibit Services, Inc. pursuant to which STAK was to sell substantially all of its assets to Spoon on a going concern basis. However, Spoon has determined that it will not close the purchase. Spoon and the Debtor dispute whether the failure to close the sale is a breach of the APA. That matter will be dealt with in due course. However, it was expected that Spoon would be taking possession and relocating the majority of the FF&E located at the premises. That now will not happen. Accordingly, the Debtor has determined that the most prudent course of action is to expand the authority of Rosen Systems, Inc., which has been employed as an auctioneer to sell all of the FF&E, including the FF&E that was to be purchased by Spoon.
The Debtor has laid off all of its employees except for its President, Stan Zalenski. Mr. Zalenski is overseeing the removal of customer property that is stored at the premises and other matters pertaining to the wind down of STAK’s business. Between the customer property and the FF&E of STAK, which includes light industrial equipment, it is not a simple thing to vacate the premises. The Debtor has negotiated an Agreed Order with First Industrial Texas, L.P., the owner of the premises where STAK’s business is located to allow the Debtor continued occupancy though the end of May in order to allow Rosen Systems to conduct a sale that would conclude in May with buyers removing their purchases from the premises by the end of May.
STAK desires to sell the Property via online auction to the highest bidder, free and clear of all liens, claims and encumbrances, with all liens, claims and encumbrances, if any, attaching to the sale proceeds.
The auction will be conducted by Rosen Systems in accordance with the United States Trustee’s Guidelines. Rosen Systems will conduct the auction online through its website at www.rosensystems.com.
Bidding will open on May 7, 2020, at 9:00 a.m. and close at 10:00 a.m. on May 14. Inspection of the Property will take place on May 12 from 10:00 a.m. to 3:00 p.m. (or by appointment) at the Debtor’s location at 407 113th Street, Arlington, TX 76011. Removal of the Property will be weekdays from Monday, May 18 to Friday, May 22, 10:00 a.m. to 4:00 p.m. Sale of the Property in the auction is as is, where is.
As previously reported, STAK Design asked the Court to authorize the private sale of substantially all assets to Spoon for $175,000, subject to overbid.
In an Order dated March 12, 2020, available at https://bit.ly/2JEJjY7 from Leagle.com, Bankruptcy Judge Harlin DeWayne Hale authorized the sale, free and clear of liens, claims, encumbrances, and interests. The Court also authorized the assumption and assignment of various executory contracts and unexpired leases to Spoon; and held that Spoon is a good faith buyer within the meaning of Section 363(m) of the Bankruptcy Code.
STAK has marketed the Assets for over 14 months. Those efforts resulted in a number of parties executing non-disclosure agreements and conducting due diligence into a possible transaction with STAK, but only Spoon has made a binding offer. STAK has a limited window of time to complete a going concern transaction due to its lease expiring and having limited operating capital. Shortly before the Petition Date, STAK began negotiations with Spoon. Those negotiations continued for a period of time shortly after the Petition Date. Finally, on Feb. 5, 2020, STAK and Spoon entered into the Purchase Agreement, which requires that the sale of Assets from STAK to Spoon be consummated through a Chapter 11 Sec. 363 sale process.
STAK Design, Inc., Debtor, represented by John Mark Chevallier — email@example.com — McGuire, Craddock & Strother, P.C.
About Stak Design
STAK Design, Inc. is a custom design, engineering, and manufacturing firm. The Company works directly with architects, designers, developers, and general contractors for custom millwork, retail displays, kiosks, RMUs, specialty environments, and custom tradeshow exhibits.
The Debtor filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 20-30424) on Feb. 4, 2020. In the petition signed by Stanley Zalenski, president, the Debtor was estimated to have between $500,000 and $1 million in assets and $1 million and $10 million in liabilities. Judge Harlin Dewayne Hale is assigned to the case. McGuire, Craddock & Strother, P.C., represents the Debtor.