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19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 1 of 236 Edward O. Sassower, P.C. Steven J. Reisman Joshua A. Sussberg, P.C. KATTEN MUCHIN ROSENMAN LLP KIRKLAND & ELLIS LLP 575 Madison Avenue KIRKLAND & ELLIS INTERNATIONAL LLP New York, New York 10022 601 Lexington Avenue Telephone: (212) 940-8800 New York, New York 10022 Facsimile: (212) 940-8776 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 -and- Chad J. Husnick, P.C. W. Benjamin Winger (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Co-Counsel for the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ) In re: ) Chapter 11 ) BARNEYS NEW YORK, INC., et al.,1 ) Case No. 19-36300 (CGM) ) Debtors. ) (Jointly Administered) ) NOTICE OF ENTRY INTO STALKING HORSE PURCHASE AGREEMENT AND RELATED DEADLINES UNDER THE BIDDING PROCEDURES On August 22, 2019, the United States Bankruptcy Court for the Southern District of New York (the “Court”) entered the Order (I) Approving the Bidding Procedures, (II) Scheduling the Bid Deadlines and the Auction, (III) Approving the Form and Notice Thereof, and (IV) Granting 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, include: Barneys New York, Inc. (1818); Barney’s Inc. (2980); BNY Catering, Inc. (4434); BNY Licensing Corp. (4177); and Barneys Asia Co. LLC (0819). The location of the Debtors’ service address is 575 Fifth Avenue, New York, New York 10017. 19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 2 of 236 Related Relief [Docket No. 156] (the “Bidding Procedures Order”),2 approving procedures authorizing the Debtors to market the Assets and to conduct an Auction for their Sale. PLEASE TAKE FURTHER NOTICE that, on October 16, 2019, consistent with the Bidding Procedures Order and the Bidding Procedures, and in consultation with the Consultation Parties, the Debtors designated the Stalking Horse Bidders and entered into a Stalking Horse Purchase Agreement (the “Stalking Horse Purchase Agreement”). A copy of the proposed Stalking Horse Purchase Agreement is attached hereto as Exhibit A and the material terms of which are set forth in the table below.3 Purchasers ABG-Barneys, LLC and B. Riley Financial, Inc. Acquired Assets Substantially all of the Debtors’ assets, subject to certain exclusions set forth in the Stalking Horse Purchase Agreement (which may include certain leases). Purchase Price Estimated to be approximately $271,400,000 in cash. Purchase price is equal to the sum of the DIP Obligations, the Wind Down Amount, the Prepaid Expenses Amount, the Seller Proration Amount, minus the Buyer Proration Amount, the Post-Closing Royalty Payment Amount, the Pre-Closing Royalty Payment Amount, and the Pre-Closing, Proceeds Credit. Wind Down Amount $27,000,000, to be advanced by B. Riley from time to time pursuant to the Wind Down Budget. Bid Protections The Break-Up Fee and Expense Reimbursement, to the extent both are payable, are equal to three percent of the Purchase Price—i.e., $8,142,000. 2 All capitalized terms used but not otherwise defined herein shall have the meaning ascribed to them in the Bidding Procedures Order. 3 Capitalized terms used in the table but not otherwise defined herein shall have the meaning set forth in the Stalking Horse Purchase Agreement. The descriptions set forth in the table are solely for summary purpose. In event of a discrepancy between the summary herein and the terms of the Stalking Horse Purchase Agreement, the terms of the Stalking Horse Purchase Agreement shall control in all respects. 2 19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 3 of 236 Agency Agreement The Debtors shall enter into an Agency Agreement pursuant to which B. Riley and/or Great American may undertake store closings and monetize inventory and other Acquired Assets. Fiduciary Out The Debtors and their respective officers, directors, or members are entitled to take any action, or to refrain from taking any action, to the extent inconsistent with their fiduciary obligations. The Debtors retain the right to terminate the Stalking Horse Purchase Agreement and/or pursue any transaction or restructuring strategy that, in the Debtors’ business judgment, will maximize the value of their estates, subject to the Bid Protections. PLEASE TAKE FURTHER NOTICE that consummation of transactions contemplated under the Stalking Horse Purchase Agreement is subject to Court approval and any higher or better offers. PLEASE TAKE FURTHER NOTICE that all Bids must be received no later than October 22, 2019, at 5:00 p.m. prevailing Eastern Time (the “Bid Deadline”). Parties interested in submitting Bids may contact the Debtors’ investment banker, Houlihan Lokey Capital, Inc., 245 Park Avenue, 20th Floor, New York, New York, 10167, Attn: Steven Tishman ([email protected]), Saul Burian ([email protected]), and Jason Feintuch ([email protected]). PLEASE TAKE FURTHER NOTICE that if the Debtors receive any additional Qualified Bids prior to the Bid Deadline, the Debtors may conduct an Auction no later than October 24, 2019, at 9:00 a.m. prevailing Eastern Time at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue, New York, NY 10022. PLEASE TAKE FURTHER NOTICE that the Debtors may seek approval of the Sale at the Sale Hearing scheduled to commence on October 31, 2019 at 10:00 a.m. prevailing Eastern Time (the “Sale Hearing”) before the Honorable Cecelia G. Morris, United States Bankruptcy Judge, United States Bankruptcy Court for the Southern District of New York, at the United States 3 19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 4 of 236 Bankruptcy Court for the Southern District of New York, 355 Main Street, Poughkeepsie, New York 12601. PLEASE TAKE FURTHER NOTICE that the deadline to object to approval of the proposed Sale is October 29, 2019 at 12:00 p.m. prevailing Eastern Time. PLEASE TAKE FURTHER NOTICE that a copy of the Bidding Procedures Order may be obtained free of charge by visiting the website of Stretto at http://case.stretto.com/barneys. You may also obtain copies of any pleadings by visiting the Court’s website at http://www.nysb.uscourts.gov in accordance with the procedures and fees set forth therein. Dated: October 16, 2019 /s/ Joshua A. Sussberg, P.C. New York, New York Edward O. Sassower, P.C. Joshua A. Sussberg, P.C. KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 601 Lexington Avenue New York, New York 10022 Telephone: (212) 446-4800 Facsimile: (212) 446-4900 -and- Chad J. Husnick, P.C. W. Benjamin Winger (admitted pro hac vice) KIRKLAND & ELLIS LLP KIRKLAND & ELLIS INTERNATIONAL LLP 300 North LaSalle Street Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 -and- Steven J. Reisman KATTEN MUCHIN ROSENMAN LLP 575 Madison Avenue New York, New York 10022 Telephone: (212) 940-8800 Facsimile: (212) 940-8776 Co-Counsel for the Debtors and Debtors in Possession 4 19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 5 of 236 EXHIBIT A Stalking Horse Purchase Agreement 19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 6 of 236 Execution Version ASSET PURCHASE AGREEMENT BY AND AMONG BARNEY’S NEW YORK, INC., THE OTHER SELLERS PARTY HERETO, ABG-BARNEYS, LLC, AND B. RILEY FINANCIAL, INC. October 16, 2019 19-36300-cgm Doc 356 Filed 10/16/19 Entered 10/16/19 19:22:34 Main Document Pg 7 of 236 TABLE OF CONTENTS Page ARTICLE I DEFINITIONS .......................................................................................................... 2 Section 1.1 Definitions............................................................................................ 2 Section 1.2 Interpretations .................................................................................... 21 Section 1.3 Consummation of the Agency Agreement Transactions ................... 22 ARTICLE II PURCHASE AND SALE ...................................................................................... 22 Section 2.1 Purchase and Sale of Assets ............................................................... 22 Section 2.2 Assumed Liabilities ........................................................................... 22 Section 2.3 Consideration; Deposit; Escrow Amount .......................................... 23 Section 2.4 Closing ............................................................................................... 24 Section 2.5 Closing Payments and Deliveries ...................................................... 24 Section 2.6 Reserved ............................................................................................. 25 Section 2.7 Post-Closing Purchase Price Adjustment........................................... 25 Section 2.8 Assumption/Rejection of Certain Contracts and Leases and Designation Rights ............................................................................. 27 Section 2.9 Allocation ........................................................................................... 30 Section 2.10 Proration ............................................................................................. 31 Section 2.11 Removal of Excluded Assets ............................................................. 32 Section 2.12 Withholding ......................................................................................