BSCV claims Versa was never committed to deal, argues against payment of break-up fee

By Caroline Salls

Pittsburgh, Jan. 13 - BSCV, Inc., formerly Boscov's, Inc., and its official committee of unsecured creditors objected to Versa Capital Management, Inc. and Regio BDS, LLC's motion for payment of a super-priority claim arising from a break-up fee or administrative expense claim, arguing that the potential buyers were never fully committed to making a deal.

In addition, the company and the committee said Versa did not secure the financing necessary to close on its offer to buy Boscov's assets, giving the company the right to terminate the asset purchase agreement without being obligated to pay a break-up fee.

According to the objection filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware, the company spent "enormous sums" trying to complete a going-concern sale deal with Versa, but the potential buyer "sought to maintain a continuing option to acquire the debtors at a bargain price, free from competition from other buyers."

"Although Versa would have this court believe that it was the debtors' white knight, committed from the onset of these bankruptcy cases to rescuing the debtors from their financial peril, only to be cast aside by the debtors at the last moment in favor of a consortium of insiders, the reality is something quite different," the company and committee said in the objection.

"Indeed, the story of Versa's courtship is more the tale of an opportunistic undertaker."

Once Versa's strategy became clear, the company's estate was forced to seek other alternatives for a going-concern sale to preserve Boscov's business and thousands of jobs, according to the objection.

Boscov's, a Reading, Pa.-based regional department store chain, filed for bankruptcy on Aug. 4. Its Chapter 11 case number is 08-11637.

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