[3/20/17] HHGregg on Thursday said it has terminated its previously announced nonbinding term sheet with an anonymous party to purchase substantially all of its assets through a reorganization under Chapter 11 of the United States Bankruptcy Code, for which it filed March 6.
- The companies were unable to reach a definitive agreement on terms, according to a press release. The struggling electronics retailer has obtained interim approval of its $80 million debtor-in-possession loan facility to fund operations of the business during the sale process.
- The mystery bidder appears to be the retailer’s ad agency, Zimmerman Advertising, an unsecured creditor owed more than $6 million, according to Indianapolis Business Journal citing attorney statements in court and court filings. Another vendor, Haier US Appliance Solutions, objected to dedicating $6 million of the $8 million being set aside to pay vendors, according to that report. The deal could yet be revived, as it continues to be negotiated, according to The Wall Street Journal.
When the deal with its unnamed suitor was announced, CEO Robert J. Riesbeck said that the retailer was poised “to come out of this debt-free and more agile.” But with the plans dashed, HHGregg must move forward in its Chapter 11 process without a stalking horse bid to set the stage for any bankruptcy auction. The company said it will continue to operate in the ordinary course of business throughout the restructuring process, though that takes into account the closure of 88 stores (representing some 40% of its fleet).