Fortunoff Update in Newsday
Documents: 'Best' bid for Fortunoff from liquidators
BY KEIKO MORRIS | [email protected]
February 24, 2009
Fortunoff launched the auction of its assets yesterday with at least one bid from two companies proposing to liquidate the company's merchandise and offering to honor customers' gift cards for a limited period during the process.
The Westbury-based jewelry and home goods retailer described the proposal from well-known liquidating firms Hilco Merchant Resources and Gordon Brothers Retail Partners, as the 'initial highest' or 'best qualified bid,' in court documents.
The auction continued through the day yesterday, and it was unclear by the evening whether there were other bidders. A spokeswoman for Fortunoff's parent company, NRDC Equity Partners Llc, declined to comment yesterday, as did a spokeswoman for Hilco. Gordon Brothers did not immediately return calls yesterday.
Fortunoff, which filed for Chapter 11 bankruptcy protection on Feb. 5, had said it was seeking a buyer to purchase the company and possibly continue operating the chain. But as the auction date neared, no potential new owners surfaced and the company laid off about 300 workers in its corporate offices.
Just last week, the U.S. trustee overseeing the case filed a motion suggesting that the case be converted from a reorganization bankruptcy case to a liquidation bankruptcy. The motion requested a hearing to address the issue today and it is not clear what effect, if any, that will have on the outcome of the auction.
Also last week, Fortunoff announced that it would no longer accept gift cards, but the proposal from Hilco and Gordon Brothers offers to honor gift cards issued before any potential going-out-of-business sale until March 8.
'If someone indeed does buy it [Fortunoff] and honors the gift card, it's only right, especially because there was no notice for anyone,' said Bradford Marcus, of Great Neck. He and his fiancee, Victoria Berger, said they had $660 remaining on a gift card.
While customers expressed frustration over their gift cards, vendors with decades-long relationships with Fortunoff also said they felt burned by Fortunoff's second bankruptcy filing in as many years.
Bruce Pucciarello, head of Novell Enterprises Inc., a bridal jewelry manufacturer based in Rahway N.J., said Fortunoff buyers were pushing hard as late as January to purchase jewelry for the long-planned placement of Fortunoff jewelry boutiques within Lord & Taylor stores, also owned by NRDC.
He said he and others agreed to a discount and payment 60 days after receipt. Now he's looking at a $250,000 loss. He said his company is strong financially but that other vendors are not as fortunate. The way bankruptcy laws are written, vendors like him have little chance of recovering anything.
'Yes, in this economy there is going to be a thinning down of companies,' Pucciarello said, noting that bankruptcy laws need to be overhauled. 'But it doesn't make sense if we eliminate good ones because the laws favor the bad ones.'
Gordon Brothers Retail Partners and Hilco Merchant Resources have handled store closing and company liquidation sales for several major retailers.
Gordon Brothers Retail is a unit of Gordon Brothers Group, based in Boston.
CLIENTS
Bombay Co.
CompUSA
Expo Design Centers
Discovery Channel Store
Hilco Merchant Resources
Based in Northbrook, Ill.
CLIENTS
Goody's Family Clothing Inc.
Linens 'n Things
Article
BY KEIKO MORRIS | [email protected]
February 24, 2009
Fortunoff launched the auction of its assets yesterday with at least one bid from two companies proposing to liquidate the company's merchandise and offering to honor customers' gift cards for a limited period during the process.
The Westbury-based jewelry and home goods retailer described the proposal from well-known liquidating firms Hilco Merchant Resources and Gordon Brothers Retail Partners, as the 'initial highest' or 'best qualified bid,' in court documents.
The auction continued through the day yesterday, and it was unclear by the evening whether there were other bidders. A spokeswoman for Fortunoff's parent company, NRDC Equity Partners Llc, declined to comment yesterday, as did a spokeswoman for Hilco. Gordon Brothers did not immediately return calls yesterday.
Fortunoff, which filed for Chapter 11 bankruptcy protection on Feb. 5, had said it was seeking a buyer to purchase the company and possibly continue operating the chain. But as the auction date neared, no potential new owners surfaced and the company laid off about 300 workers in its corporate offices.
Just last week, the U.S. trustee overseeing the case filed a motion suggesting that the case be converted from a reorganization bankruptcy case to a liquidation bankruptcy. The motion requested a hearing to address the issue today and it is not clear what effect, if any, that will have on the outcome of the auction.
Also last week, Fortunoff announced that it would no longer accept gift cards, but the proposal from Hilco and Gordon Brothers offers to honor gift cards issued before any potential going-out-of-business sale until March 8.
'If someone indeed does buy it [Fortunoff] and honors the gift card, it's only right, especially because there was no notice for anyone,' said Bradford Marcus, of Great Neck. He and his fiancee, Victoria Berger, said they had $660 remaining on a gift card.
While customers expressed frustration over their gift cards, vendors with decades-long relationships with Fortunoff also said they felt burned by Fortunoff's second bankruptcy filing in as many years.
Bruce Pucciarello, head of Novell Enterprises Inc., a bridal jewelry manufacturer based in Rahway N.J., said Fortunoff buyers were pushing hard as late as January to purchase jewelry for the long-planned placement of Fortunoff jewelry boutiques within Lord & Taylor stores, also owned by NRDC.
He said he and others agreed to a discount and payment 60 days after receipt. Now he's looking at a $250,000 loss. He said his company is strong financially but that other vendors are not as fortunate. The way bankruptcy laws are written, vendors like him have little chance of recovering anything.
'Yes, in this economy there is going to be a thinning down of companies,' Pucciarello said, noting that bankruptcy laws need to be overhauled. 'But it doesn't make sense if we eliminate good ones because the laws favor the bad ones.'
Gordon Brothers Retail Partners and Hilco Merchant Resources have handled store closing and company liquidation sales for several major retailers.
Gordon Brothers Retail is a unit of Gordon Brothers Group, based in Boston.
CLIENTS
Bombay Co.
CompUSA
Expo Design Centers
Discovery Channel Store
Hilco Merchant Resources
Based in Northbrook, Ill.
CLIENTS
Goody's Family Clothing Inc.
Linens 'n Things
Article
