The path is now clearer for Cleveland businessman Allan Jones to acquire the assets of Hardwick Clothes.
U.S. Bankruptcy Judge Shelley D. Rucker signed the order late Tuesday approving the bidding procedures to allow the sale of the company’s assets “free and clear of liens, claims, rights, interests and encumbrances.”
A hearing that had been scheduled for earlier Tuesday morning was canceled and Jones CapitalCorp. would only provide the quote, “We are proceeding,” when asked for comment by the Cleveland Daily Banner.
The order shows Jones acquiesced to reducing the $200,000 expense reimbursement fee which the major debtor, the Pension Guaranty Benefit Corporation, had objected to, saying it was out of line historically with other similar cases.
During the hearing on April 10, Rucker said she could approve the procedures if that amount was reduced to $100,000.
Tuesday’s order shows the reduced amount and confirms what Jones told the Banner on Friday.
“While we were disappointed with the amount the court set as the reimbursement for the expenses we have incurred in the event we are not the successful bidder, we respect the very difficult decision the court was forced to make in light of the objection filed by the PBGC,” Jones said. “We accept Judge Rucker’s decision and plan to move forward in saving this company and its many loyal employees.”
There are now two calendars in play to determine Hardwick’s future.
Rucker’s final order requires qualifying bids to be made by May 16 at 5 p.m.
Objections to the sale would have to be filed with the court by May 20 at 4 p.m.
Then the events could move one of two ways.
Time frame No. 1:
If no competing bid to Jones’ $2 million offer is received or considered to be “qualifying,” a hearing would be held in U.S. Bankruptcy Court on May 21, at 1:30 p.m., “for the purpose of entering an order approving the sale of the purchased assets to the prevailing bidder.”
That would be Jones’ clearest path to taking ownership of Hardwick.
Time frame No. 2:
Should a competing, qualifying bid be received, an auction would be held at 9 a.m. on May 19 and a May 21 hearing would still be held unless the competing bidders request 15 days for “due diligence” — more time to review Hardwick’s assets and records.
The new bidder or bidders would then have until May 30 to submit their final bid and the hearing would be scheduled for June 6 at 9:30 a.m.
Jones has not given any signs he is worried about not making the acquisition.
During the April 10 hearing, Jones chief financial officer Joe Mason testified the company had three candidates for the Hardwick CEO job visiting the area during the coming week.
And Jones himself was showing employees redesigned labels that would be affixed to apparel produced by the company after the acquisition takes place.
“I’ve got a thousand ideas,” he was heard to tell one employee.