(Bloomberg) — Jessica Simpson’s family offered to buy the singer-turned-fashion entrepreneur’s brand out of bankruptcy for $65 million, a lawyer said in court Wednesday.
Sequential Brands Group Inc., which owns the rights to the Jessica Simpson fashion collection, filed bankruptcy Tuesday with plans to hold an auction for its aging brands.
The day before the company sought court protection from creditors, Sequential made a tentative deal with the Simpson family, company attorney Joshua Brody told the judge overseeing the Chapter 11 case in Wilmington, Delaware.
The company will try to get a final agreement in the coming weeks to have the Simpson family act as the so-called stalking horse bidder at an auction, Brody said. Two other current partners, Galaxy Active and Centric Brands, have also agreed to serve as lead bidders for other assets, setting a floor price for the brands they are trying to buy.
Read More: Jessica Simpson-Brand Owner Files Bankruptcy as Retail Sinks
Should a judge approve those agreements, Galaxy Active would make a binding, initial offer of $333 million for the so-called Active Division; Centric Brands, which holds a long-term license for Joe’s Jeans, would offer $42 million for the denim and sportswear label.
The company plans to hold an auction to try to attract investors willing to pay more for the brands.
Sequential was in court to seek routine approval to keep operating while it reorganizes.
U.S. Bankruptcy Judge John Dorsey gave the company interim permission to borrow as much as $141 million to refinance senior debt and to help cover the costs of the Chapter 11 case; the company will return in the coming weeks to borrow about $9 million more.
Sequential has a restructuring deal with lenders, including affiliates of Apollo Global Management Inc. and KKR & Co., according to court documents.
The company blamed its bankruptcy on falling revenue from licensing deals and the pandemic, which began last year just as Sequential was gearing up to restructure. In its Chapter 11 11 petition, the company listed debts of $435 million and assets of $443 million.
The case is Sequential Brands Group, Inc. 21-11194, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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