NEW YORK (Reuters) – Bankrupt retailer The Sharper Image Corp SHRPQ.PK has won court approval to sell itself in a bankruptcy auction later this month, according to court documents.
A joint venture between private investment groups won the right to be the “stalking horse bidder” for the retailer of high-end gadgets and assets, the group said on Wednesday.
In a stalking-horse bid, the bankrupt company chooses the entity from a pool of bidders to make the first bid for its assets.
The joint venture, led by Toronto-based investment firm Hilco Consumer Capital and a unit of Boston-based liquidation firm Gordon Brothers, will receive a break-up fee of as much as 2 percent of the purchase price if the deal does not go through, according to court documents.
The firms said in a statement they had developed a licensing strategy for The Sharper Image brand and will partner with several global institutions to continue development of the company.
Windsong Brands LLC and Crystal Capital also partnered to buy the retailer through the bid.
The auction will be held on May 28, the documents showed.
The retail chain's former chairman Jerry Levin also expressed interest in rounding up investors to make a bid for some or all of the company, when he resigned last month.
The Sharper Image had put itself up for sale last month after filing for Chapter 11 bankruptcy protection in February, saying a sale was the best route given the weak U.S. economy and tight credit.
Hilco Consumer Capital is a unit of the Hilco Organization, a privately owned financial services firm with headquarters near Chicago. It had also acquired assets of furniture company Bombay Co and New York-based Apparel Holdings Group, which operates the Caribbean Joe, Periscope, and Cupid's Cup labels.
The company's stock rose 1.5 cents to 20.5 cents on Wednesday.
(Reporting by Emily Chasan, editing by Richard Chang and Sue Thomas)