(Bloomberg) — Jessica Simpson’s family offered to buy the brand of the singer-turned-fashion entrepreneur out of bankruptcy for $65 million, a lawyer said in court on Wednesday.
Sequential Brands Group Inc., which owns the rights to Jessica Simpson’s fashion collection, filed for bankruptcy on Tuesday with plans to hold an auction for its aging brands.
The day before the company sought protection from creditors, Sequential struck a preliminary deal with the Simpson family, corporate attorney Joshua Brody told the judge overseeing the Chapter 11 case in Wilmington, Delaware.
The company will try to reach a final agreement in the coming weeks to let the Simpson family act as the so-called stalking horse bidder 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:Jessica Simpson brand owner files for bankruptcy as retail sinks
Should a judge approve those agreements, 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 said to offer $42 million for the denim and sportswear label.
The company plans to hold an auction to attract investors willing to pay more for the brands.
Sequential was in court seeking routine approval to continue operating while it reorganized.
US bankruptcy judge John Dorsey gave the company interim permission to borrow as much as $141 million to refinance senior debt and help cover the costs of the Chapter 11 lawsuit; the company will return in the coming weeks to borrow about $9 million more.
Sequential has a restructuring agreement with lenders, including subsidiaries of Apollo Global Management Inc. and KKR & Co., according to court documents.
The company blames the bankruptcy on declining revenue from licensing deals and the pandemic, which began last year just as Sequential was gearing up to restructure. In its Chapter 11 11 petition, the company listed debts of $435 million and assets of $443 million.
The case is Sequential Brands Group, Inc. 21-11194, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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