The sale of Edwin Watts Golf Shops LLC took an important step forward Nov. 20, even if one of its potential buyers did not.
As first reported by Law 360, a Delaware bankruptcy judge set the date of the auction of the retailer for Dec. 3, despite news that a joint venture to set the auction floor at a minimum bid of $45 million had collapsed.
“It’s not the happiest place to be in, but it’s the reality of the case,” said Edwin Watts attorney Dominic E. Pacitti of Klehr Harrison Harvey Branzburg LLP.
The golf specialty retailer filed for Chapter 11 bankruptcy protection Nov 4. According to papers filed in U.S. Bankruptcy Court in Wilmington, Del., the Fort Walton Beach, Fla.-based retailer cited a decrease in consumer spending and participation in the sport for its financial troubles, and listed assets and liabilities between $100 million and $500 million.
All 90 Edwin Watts retail locations and its web portal remain in business as it seeks protection from its creditors. The retailer, which was founded in 1968 and is owned by private equity firm Sun Capital Partners Inc., sought to sell its assets worth at least $45 million. The company noted in its Nov. 4 filing that it agreed to sell certain assets to GWNE Inc., the owner of golf retailers such as Golfers Warehouse, Van’s Golf Shops, Roger Dunn Golf Shops and The Golf Mart. GWNE would operate a “significant number” of stores under the Edwin Watts name while Hilco Merchant Resources LLC would liquidate the remaining locations, according to the declaration.
Sun Capital, which purchased Edwin Watts in 2007, must hope that a new bidder will emerge after GWNE and Hilco failed to secure the necessary financing to exercise their joint venture. The former bidders surrendered their $500,000 deposit, according to a Law 360 report.
U.S. Bankruptcy Judge Mary F. Walrath said Watts may continue to conduct a so-called blind auction on Dec. 3 and set the bid deadline for the day before the auction.