Investors’ Bid For Bon-Ton May Not Fly In Bankruptcy Court
The judge has ruled that Bon-Ton may not pay a work fee to move the letter of intent to an actual bid.
YORK, PA–A potential bid by Washington Prime Group, Namdar Realty Group and DW Partners to buy Bon-Ton to keep it a going concern has suffered a setback in the US bankruptcy court in Delaware.
Judge Mary F. Walrath will not allow the department store chain to pay $500,000 to cover the investors’ due diligence costs, according to news reports. The so-called work-fee payment is necessary for the investors to move from a letter of intent to an actual bid.
Walrath said there was no precedent for Bon-Ton to pay this fee; in addition there were three other groups that have made actual bids for the retailer. These groups want to buy Bon-Ton and liquidate it.
Bon-Ton has told reporters that it remains “in active discussions with DW Partners and other members of the investor group to complete an asset purchase agreement as we proceed toward the court-supervised auction scheduled to be held on April 16, 2018.”
Earlier this week the three investors — two of which own malls in which Bon-Ton is a tenant — announced a letter of intent to bid for Bon-Ton with the goal of keeping it a going concern. The group hopes to pay $128 million for almost all of the department store assets in an auction that has been scheduled for April 16, 2018.