Friday, October 17, 2008

Update on Boscov's

I mentioned a few weeks ago a rumor that the Boscov family is interested in buying the chain out of bankruptcy; apparently that has been confirmed.

Members of the family that founded and ran the Boscov's department store chain for 97 years before it landed in bankruptcy in August reportedly have submitted a bid to buy back the business.

Albert R. Boscov and his brother-in-law Edwin A. Lakin are among the group that put in an offer for Boscov's Department Store L.L.C. in a bankruptcy auction that culminates next week with the selection of a winning bidder, Boscov said in a report published today.

The question now would seem to be the financing, a pretty big question these days:

A successful buyer would also have to be able to produce financing to satisfy the banks holding sizable loans to Boscov's and that have considerable sway over bankruptcy proceedings.

If the Boscov family can come up with the financing needed to pass muster with the company's biggest banks, "this could be a tremendous deal for them," said Pittsburgh lawyer John C. Rodney, who specializes in bankruptcy buyouts with Thorp, Reed & Armstrong L.L.P.

Creditors are hoping for competing bids, both because the family would like to keep the chain going rather than liquidating it, and because the only current bid would pay them about twelve cents on the dollar for existing debts.

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