Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern District of New York authorized the bidding procedures proposed by KB US Holdings, Inc. and affiliates in connection with the sale of substantially all assets to TLI Bedrock, LLC for approximately $75 million, subject to overbid.
The Debtors’ entry into and performance under the Stalking Horse Purchase Agreement is approved. The Stalking Horse Bidder will be deemed a Qualified Bidder, and the bid of the Stalking Horse Bidder contemplated by the Stalking Horse Purchase Agreement will be deemed a Qualified Bid.
The Debtors are authorized to pay the Termination Fee and Negotiated Expense Amount, subject to the terms and limitations of the Stalking Horse Purchase Agreement. To the extent payable subject to such terms and limitations, the Termination Fee and Negotiated Expense Amount will constitute a first-priority administrative expense of the Debtors and will be paid within two days of the Sale Closing from the proceeds of any Sale with a party other than the Stalking Horse Bidder in connection with the Acquired Assets, and without need of further order or application to the Bankruptcy Court. No other termination payments are authorized or permitted under the Order.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 9, 2020 at 12:00 p.m. (ET)
b. Initial Bid: A monetary value greater than the sum of (i) the Purchase Price set forth in the Stalking Horse Purchase Agreement, (ii) the Termination Fee, and (iii) $500,000
c. Deposit: 10% of the cash Purchase Price of the Bid
d. Auction: The Auction, if any, will take place at 10:00 a.m. (ET) on Oct. 13, 2020 at the offices of Proskauer Rose LLP, Eleven Times Square, New York, New York 10036, or at such other venue (or by such other medium) as may be agreed to by the Debtors and the Consultation Parties, or such later date and time as selected by the Debtors after consultation with the Consultation Parties.
e. Bid Increments: $500,000
f. Sale Hearing: In accordance with the Bidding Procedures, if: (a) the Stalking Horse Bid is the only Qualified Bid received by the Debtors in respect of the Assets by the Bid Deadline, the Sale Hearing for the Assets will be held before the Court on Oct. 13, 2020, at 10:00 a.m. (ET); or (b) if a Qualified Bid other than the Stalking Horse Bid is received by the Debtors in respect of the Assets by the Bid Deadline, the Sale Hearing for the Assets will be held on Oct. 15, 2020 at 10:00 a.m. (ET).
g. Sale Objection Deadline: (i) Oct. 9, 2020 at 12:00 p.m. (ET) if the Sale Objection is with respect to the sale of the Acquired Assets to the Stalking Horse Bidder pursuant to the Stalking Horse Purchase Agreement; or (ii) on or before the date and time of the Sale Hearing, if the Sale Objection is with respect to the Successful Bidder(s) other than the Stalking Horse Bidder
h. Any Qualified Bidder that has a valid and perfected lien on any Assets and the right to credit bid claims secured by such liens will have the right to credit bid all or a portion of such Secured Creditor’s secured claims.
The form of Sale Notice is approved. Within two business days after the entry of the Order, the Debtors will serve the Order, the Bidding Procedures, and Sale Notice upon the entities on the Master Service List, the Sale Notice Parties, and any party that has requested notice pursuant to Bankruptcy Rule 2002.
The Debtors will provide to requesting Contract Counterparties, and their counsel, via email the Adequate Assurance Information (a) with respect to the Stalking Horse Bidder on Sept. 18, 2020 at 4:00 p.m. (ET), and (b) with respect to the Bidders, other than the Stalking Horse Bidder, on Oct. 9, 2020 at 4:00 p.m. (ET).
Within one calendar day after the conclusion of the Auction (or as soon as reasonably practicable thereafter), the Debtors will file with the Court and serve on the Sale Notice Parties, and cause to be published on the Noticing Agent’s website, the Notice of Auction Results.
The form of the Cure Notice is approved. On Sept. 18, 2020, the Debtors will file with the Court and serve and upon the Contract Counterparty’s counsel of record (if known), the Cure Notice on all Contract Counterparties, and post the Cure Notice to the website of the Noticing Agent (https://cases.primeclerk.com/KB). The Cure Objection Deadline is Oct. 2, 2020 at 4:00 p.m. (ET).
Notwithstanding the possible applicability of Bankruptcy Rules 6004(h), 6006(d), 7062, or 9014, or any applicable provisions of the Bankruptcy Rules or the Local Rules or otherwise stating the contrary, the terms and conditions of the Order are immediately effective and enforceable upon its entry, and any applicable stay of the effectiveness and enforceability of the Order is waived.
A copy of the Agreement and the Bidding Procedures is available at https://tinyurl.com/yyu9gzux from PacerMonitor.com free of charge.
About KB US Holdings
KB US Holdings, Inc. is the parent company of King Food Markets and Balducci’s Food Lover’s Market.
Headquartered in Parsippany, N.J., Kings Food Markets has been a specialty and gourmet food market across the East Coast. In 2009, Kings Food Markets acquired specialty gourmet retail grocer, Balducci’s Food Lover’s Market. As of the petition date, the Debtors operate 35 supermarkets across New York, New Jersey, Connecticut, Virginia, and Maryland.
KB US Holdings and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22962) on Aug. 23, 2020. At the time of the filing, Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range.
Judge Sean H. Lane oversees the cases.
The Debtors tapped Proskauer Rose LLP as their legal counsel, Peter J. Solomon as investment banker, Ankura Consulting Group LLC as financial advisor, and Prime Clerk LLC as claims, noticing and solicitation agent.