GlobeSt.com sister publication AmLaw Daily reports that Crown Acquisitions filed the motion on Tuesday, calling the auction "a travesty." Crown and lawyers King & Spalding argued in the filing that Filene's and attorneys Pachulski Stang Ziehl & Jones, as well as the creditor's committee counsel ignored Crown's complaints of violations because they believed the Men's Wearhouse bid was the best one.
According to AmLaw Daily, the filing also alleged that locally based Men's Wearhouse and its attorneys K&L Gates missed the bid application deadline, failed to fulfill conditions required of the bid, and conspired with Filene's and the creditor's committee to change its bid in the middle of the auction. The result is that Men's Wearhouse has dropped its $67 million offer for Filene's Basement. Another auction is scheduled for Wednesday, June 23.
Men's Wearhouse chairman of the board and CEO George Zimmer declined to make specific comments about the suit or the pending auction at the company's June 11 Q2 2009 conference call. "Since it's a work in progress, and we're involved in ongoing negotiations, I have nothing to say about it now, or later in the call," he commented.
He did comment on how the Filene's Basement acquisition might impact K&G, Men's Wearhouse off-price brand. "We noticed they sell more women's wear than we do," he remarked. "They sell more sportswear. We have less urban." Assuming the Filene's Basement acquisition moves forward, "our default position still strengthens K&G, and we still see K&G as our primary growth vehicle moving forward," he said.
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