Court Amends RedEnvelope Bankruptcy Plan
By Staff -- Gifts & Decorative Accessories, 4/25/2008 1:45:00 PM
San Francisco — The U.S. Bankruptcy Court in San Francisco approved catalog and Internet gift retailer RedEnvelope Inc.’s plan to enter into a $4.5 million debtor-in-possession agreement, as well as certain asset sale procedures, including Creative Catalogs’ status as the “stalking horse bidder.”However, the court capped the breakup fee Creative Catalogs would receive if RedEnvelope sells to someone else at 4.5 percent of the $5.7 million price, as opposed to the 5 percent the companies had agreed on. The court also eliminated the 2 percent expense reimbursement provision, and lowered the initial overbid required of a rival suitor to $350,000 from $500,000.
The court scheduled the sale hearing and auction of the company's assets for May 27 at 9:30 a.m. A final court order regarding sale procedures is expected to be issued on or about Monday, April 28.
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