Bombay wins court OK for quick auction

Hopes to have deal by mid-October

-- Home Accents Today, 10/1/2007 10:38:00 AM

FORT WORTH, Texas — The Bombay Company, which filed for Chapter 11 bankruptcy protection last week, has received approval for a quick auction to sell itself in a complete liquidation, as a going concern, or as something in between.

The long-struggling retailer will come in with a “stalking horse” backstop bid from an investor group referred to as the Tiger Joint Venture. The bid amount was not clear.

Tiger includes Tiger Capital Group, Crystal Capital Group and SB Capital Group. Under the agreement, the group would act as Bombay’s agent to dispose of its inventory, according to court documents. Should Bombay receive a better bid at auction, Tiger would get a $1.08 million breakup fee.

Bombay said it would make a final asset purchase agreement available by Oct. 5 and would conduct an auction seeking higher bids starting Oct. 10 and continuing the next day if necessary. In addition to competing liquidation bids, Bombay said it is seeking and would prefer offers from those interested in operating the retailer as going concern, or “hybrid” deals that include continuing some operations and closing others.    

A sale hearing would follow Oct. 12, according to the court order, but could be postponed until Oct. 15.

“Bombay has determined that the best way to maximize the return to its creditors is to place itself and its assets for sale,” the company said in a court document.

Bombay said it “embarked on an aggressive process to complete a sale by mid-October” because it knew any buyer would want to consummate the deal before the start of the holiday season.

The 419-store Top 100 company lost $52.8 million in its last fiscal year and posted a $15.4 million loss in the first quarter ended May 5. It filed for bankruptcy listing assets of $239.4 million and debts of $173.4 million.