Syms, Filene's get court approval for hiring agency, liquidation plan

By Jim Witters

Wilmington, Del., Nov. 15 - Syms Corp. and wholly owned subsidiary Filene's Basement, LLC won court approval Tuesday for the hiring of a liquidating agent and for its plan to sell its inventory by the end of the year.

The official committee of unsecured creditors and some state attorneys general objected to the plan. But the debtors said they resolved all the objections.

A final copy of the proposed order was still being hammered out late Tuesday. But judge Kevin J. Carey indicated he would sign the order that the parties were crafting together.

The liquidating agent is a joint venture of Gordon Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC.

Under the agency agreement, the joint venture has guaranteed that Syms and Filene's Basement will receive 90% of the cost value of the merchandise included in the sale.

In response to the creditors committee objections, the debtors renegotiated some language in the agreement to better protect the estates, said debtors attorney Mark Chehi.

In particular, the threshold at which the liquidating agency guarantees a 90% recovery was lowered to $62 million from $65 million, and subsequent stepdowns in recovery were reduced, he said.

The revised agreement also caps at 12 the number of leased stores the agency can keep open past Dec. 31.

Debtors attorney Suzanne D.T. Lovett said the concerns of the attorneys general were addressed by adding language that requires the agency to post signs notifying customers that Syms and Filene's usual inventory is being augmented during the going-out-of-business sale with merchandise from other vendors.

They also included a cap on augmentation, Lovett said.

The debtors hope to be ready to take advantage of the Black Friday shopping crowds the day after Thanksgiving.

Syms is a Secaucus, N.J.-based off-price clothing retailer. The joint Chapter 11 case number is 11-13511.

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