Financial Reporting
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Robbins Bros. moves forward after court OKs sale
By Michelle Graff
June 09, 2009
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| Engagement ring retailer Robbins Bros. Corp., which filed for Chapter 11 bankruptcy protection in March, will sell its California and two Dallas-Fort Worth area stores to itself, essentially, but under the control of a new company called Robbins Bros. Jewelry Inc. |
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Wilmington, Del.--After filing for Chapter 11 bankruptcy protection in March, engagement ring retailer Robbins Bros. Corp. is making a fresh start as Robbins Bros. Jewelry Inc.
According to documents filed in U.S. Bankruptcy Court for the District of Delaware in Wilmington, Del., the sale was approved by the court last month, as "the debtor did not receive any 'qualified bid' other than the bid from Robbins Bros. Jewelry Inc. and since all objections to the sale were 'withdrawn, waived, settled or resolved.'"
The sale, court papers show, allows Robbins Bros. to sell its California and two Dallas-Fort Worth area stores to itself, essentially, but under the control of a new company called Robbins Bros. Jewelry Inc., which is owned and controlled by Weston Presidio Capital IV, LP, which was a significant equity holder in Robbins Bros., prior to bankruptcy.
Outside of former Chief Executive Officer Steve Robbins, who is no longer involved in the day-to-day operation of the business, management of the old company has been kept on and Andy Heyneman is now at the helm as company president and chief executive officer.
The transaction officially closed on May 20, according to a press release on the company's Web site, with Heyneman calling the process a "humbling experience."
"During this process, we faced some incredibly difficult decisions and made hard choices in the spirit of ensuring the future for this wonderful company that has existed for nearly 90 years," Heyneman stated in a June 3 press release. "While we are all excited at the future prospects for Robbins Brothers, for now we are going to move ahead in a very careful manner. Internally we have restructured the expense and cost structure of the business; it's this kind of prudence that will enable us to prosper in the face of a difficult economy today and grow in the future when the time is right."
The sale allows Robbins Bros. Jewelry Inc. to purchase "substantially all of the debtor's assets, other than certain of its Illinois- and Texas-store related assets, free and clear of all liens, claims, encumbrances and interests," except for certain specified "assumed liabilities" and "designated executory contracts" that will remain after the purchase, court documents state.
Unsecured creditors will get no payment as part of the final plan. Secured creditors, including the bank, will be fully paid on the debt that Robbins owed.
The documents specify that the buyer will not take on any of the liabilities that the company had in respect to its previously-held employment or labor agreements, including consulting agreements and severance arrangements, pensions, employee benefit plans and other employee-related expenses, court papers said.
Robbins Bros. sold its Illinois stores as well as three Houston-area stores to Canadian jewelry manufacturer and retailer Spence Diamonds Inc., a sale that was approved on May 5, the same day as the sale to Robbins Bros. Jewelry Inc., court documents show. The Chicago stores have been closed.
Court papers make it clear that the sale of Robbins Bros. to Robbins Bros. Jewelry Inc. does not address some of the elements typical in a Chapter 11 case.
"The transaction," court documents state, "does not constitute a de facto plan of reorganization or liquidation or an element of such a plan for any of the debtor, as it does not and does not propose to: impair or restructure existing debt of, or equity interests in, the debtor; impair or circumvent voting rights with respect to any future plan proposed by the debtor; circumvent chapter 11 plan safeguards, such as those set forth in sections 1125 and 1129 of the Bankruptcy Code; or classify claims or equity interests, compromise controversies or extend debt maturities."
Once a 16-store chain with stores in California, Illinois and Texas, Robbins Bros. is now a 10-store operation, with two locations in the Dallas area and eight stores in California, the company's Web site shows.
In National Jeweler's 2009 State of the Majors report, Robbins Bros. ranked No. 35 on the list of $100 Million Supersellers, with an estimated $103.7 million in jewelry and watch sales in 2008.
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