By Steven Church | Bloomberg
Jessica Simpson’s family have offered to buy the bankrupt singer-turned-fashion entrepreneur’s brand for $ 65 million, a lawyer said in court on Wednesday.
Sequential Brands Group, which owns the rights to the Jessica Simpson fashion collection, filed for bankruptcy on Tuesday with plans to hold an auction for its aging brands.
The day before the company filed for court creditor protection, Sequential reached a tentative deal with the Simpson family, company attorney Joshua Brody told the judge overseeing the Chapter 11 case in Wilmington, Delaware.
The company will seek a final deal in the coming weeks for the Simpson family to act as the alleged bidders of stalking horses at an auction, Brody said. Two other current partners, Galaxy Active and Centric Brands, have also agreed to serve as lead bidders for other assets, setting a floor price for the brands they are trying to buy.
Read more: Brand owner Jessica Simpson files for bankruptcy as retail sinks
If a judge approved the deals, Galaxy Active would make a binding initial offer of $ 333 million for the so-called active division; Centric Brands, which has a long-term license for Joe’s Jeans, is reportedly offering $ 42 million for the denim and sportswear brand.
The company plans to hold an auction to try to attract investors willing to pay more for the brands.
Sequential was in court seeking routine approval to continue operating during its reorganization.
US bankruptcy judge John Dorsey has given the company interim approval to borrow up to $ 141 million to refinance senior debt and to help cover the costs of the Chapter 11 case; the company will return in the coming weeks to borrow about $ 9 million more.
Sequential has entered into a restructuring agreement with lenders, including companies affiliated with Apollo Global Management Inc. and KKR & Co., according to court documents.
The company blamed its bankruptcy on declining revenues from licensing agreements and the pandemic, which began last year as Sequential prepared to restructure. In its Chapter 11 petition 11, the company listed debts of $ 435 million and assets of $ 443 million.
The case is Sequential Brands Group, Inc. 21-11194, US Bankruptcy Court, District of Delaware (Wilmington).