Altrec Inc., the financially struggling online retailer in Redmond, has attracted several more prospective buyers, according to an attorney representing the company’s creditors.
A federal bankruptcy judge Tuesday set a Feb. 17 deadline to submit bids for Altrec. The move gives prospective buyers another 11 days to submit their bids. Altrec, which sells outdoor gear and clothing, has already received a purchase offer of $3.25 million from Great Outdoors Holdco LLC, an arm of the Remington Outdoor Co. Holdco provided Altrec, which filed for Chapter 11 protection Jan. 6, a $1 million loan to stay in business.
Holdco bid as a “stalking horse,” which set the baseline for any subsequent bids. Any subsequent bid, or overbid, must beat the Holdco offer by a minimum of $275,000.
At a hearing in Portland, U.S. Bankruptcy Judge Randall Dunn lowered the minimum incremental bid from $375,000 at the request of attorney Alex Velinsky of Cooley Godward Kronish, of New York, representing the committee of Altrec creditors.
Holdco, which Velinsky said arrived in December with Altrec near liquidation, prepared the company for sale. It may recoup its costs, up to $250,000, if outbid by another buyer.
The creditors committee oversees details of the Altrec sale and includes representatives from such familiar names as Patagonia, The North Face, Keen and others.
“Since the committee formed and selected Cooley as counsel, we have heard from two or three interested parties,” Velinsky said during the hearing Tuesday. “I think a little bit more time would be helpful for potential overbidders to do their due diligence.” He did not identify the potential bidders in court.
Velinsky said the original deadline for bidding, Feb. 6, gave insufficient time to “expose these assets to the market.” But, he added, “given the financial considerations of the debtor (Altrec), a long extension is just not in the cards.”
Altrec is millions of dollars in debt more than a year after a cyberattack and a separate credit-card scare in December 2011 sent the company into a financial spin, its president, Michael Morford, stated in the company filings. A tally of unsecured claims against the company that accompanies the bankruptcy filing exceeds $11 million.
“The creditors will not be made whole,” said Altrec bankruptcy attorney David Foraker in an earlier interview. “The value of the company and its current condition isn’t anywhere near the total amount of its debt.”
Altrec, already in receivership when Holdco expressed interest in the company, moved quickly to seek Chapter 11 protection, bolster its retail operation and pay its employees and its operating expenses. The receiver, turnaround specialist Clyde Hamstreet of the Portland firm Clyde Hamstreet & Associates, said Altrec is worth more as a going concern than sold off piecemeal.
Once alternative bids are received, an auction is scheduled Feb. 20, followed by a hearing Feb. 24 at which Dunn may approve a sale.
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