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ASCENA RETAIL: Sept. 16 Auction of Catherines Assets Set

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Judge Kevin R Huennekens of the U.S. Bankruptcy Court for the Eastern District of Virginia authorized the bidding procedures proposed by Ascena Retail Group, Inc. and affiliates in connection with the sale of their right, title, and interest in and to Catherines Plus Sizes assets, including: (i) specified Contracts, if assignable under applicable law; (ii) Transferred Intellectual Property and rights to collect royalties and proceeds in connection therewith from and after the Closing; (iii) Inventory that is held or otherwise designated for sale via the E-Commerce Business; (iv) Customer Data; and (vi) all Documents to the extent related to the E-Commerce Business, to City Chic Collective USA, Inc. for $16 million cash, plus the assumption of Assumed Liabilities, plus payment of the Inventory Surplus, minus (C) the Inventory Deficit, subject to overbid.

The following Stalking Horse Protections are approved and the Debtors are authorized to incur and pay the Stalking Horse Protections: (i) a Break-Up Fee in the amount of the lesser of $600,000 or three percent of the Purchase Price; and (ii) Expense Reimbursement in an amount up to $200,000.

The salient terms of the Bidding Procedures are:

a. Bid Deadline: Sept. 11, 2020 at 5:00 p.m. (ET)

b. Initial Bid: At a minimum, each Bid must have a Purchase Price equal to, or in excess of, the sum of $16 million plus the Initial Minimum Overbid Amount.

c. Deposit: 10% of the aggregate purchase price of the Bid

d. Auction: If one or more Qualified Bids (other than the Stalking Horse Bid) are received by the Bid Deadline with respect to any applicable assets, then the Debtors will conduct the Auction with respect to such assets. The Auction for the Catherines Assets will commence on Sept. 16, 2020 at 10:00 a.m. (ET) via videoconference or such other form of remote communication arranged by counsel to the Debtors, or such later time or other place as the Debtors determine, in which case the Debtors will timely notify the Stalking Horse Bidder and all other Qualified Bidders of such later time or other place, and file a notice of the change on the Bankruptcy Court’s docket for these chapter 11 cases.

e. Bid Increments: $100,000

f. Sale Hearing: Sept. 21 2020 at 11:00 a.m. (ET)

g. Sale Objection Deadline: Sept. 18, 2020 at 12:00 p.m. (ET)

As soon as reasonably practicable after the conclusion of the Auction, if any, but no later than two business days thereafter, the Debtors will file the Post-Auction Notice identifying the Successful Bidder. Within five business days of the filing of the Post-Auction Notice and, if the Successful Bidder is not the Stalking Horse Purchaser, the Debtors will file a notice detailing The Expense Reimbursement proposed to be paid to the Stalking Horse Purchaser.

The Assumption and Assignment Procedures regarding the assumption or assumption and assignment of the Catherines Executory Contracts proposed to be assumed by the Debtors and assigned to a Successful Bidder are approved. No later than Sept. 4, 2020, if applicable, the Debtors will file with the Court and serve the Cure Notice on all non-Debtor contract counterparties to the Catherines Executory Contracts and their counsel, if known. The Cure Objection Deadline is within 14 days of the date of service of the Cure Notice, at 5:00 p.m. (ET).

The Order is without prejudice to the rights of Kobie Marketing, Inc. to assert or raise any issue, claim, or objection related to the Sale, including any assumption of liability to Kobie, assumption of any executory contract of Kobie, or proposed new contract for Kobie’s services.

All time periods set forth in the Order will be calculated in accordance with Bankruptcy Rule 9006(a).

The Order will be immediately effective and enforceable upon its entry.

A copy of the Bidding Procedures and Stalking Horse APA is available at https://tinyurl.com/yycp8xke from PacerMonitor.com free of charge.

About Ascena Retail Group

Ascena Retail Group, Inc. (Nasdaq: ASNA) is a national specialty retailer offering apparel, shoes, and accessories for women under the Premium Fashion (Ann Taylor, LOFT, and Lou & Grey), Plus Fashion (Lane Bryant, Catherines and Cacique), and Value Fashion (Dressbarn) segments, and for tween girls under the Kids Fashion segment (Justice). Ascena, through its retail brands, operates ecommerce websites and approximately 2,800 stores throughout the United States, Canada, and Puerto Rico.

Ascena Retail reported a net loss of $661.4 million for the fiscal year ended Aug. 3, 2019, a net loss of $39.7 million for the year ended Aug. 4, 2018, and a net loss of $1.06 billion for the year ended July 29, 2017.

On July 23, 2020, Ascena Retail Group and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities.

The Hon. Kevin R. Huennekens is the case judge.

The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as bankruptcy counsel, Guggenheim Securities, LLC as financial advisor, and Alvarez and Marsal North America, LLC as restructuring advisor. Prime Clerk, LLC is the claims agent.