Bankruptcy court sets Robb & Stucky auction for March 7

Clint Engel -- Furniture Today, February 24, 2011

TAMPA, Fla. — A U.S. Bankruptcy Court judge here approved a March 7 date for an auction that could determine whether high-end retailer Robb & Stucky continues as a going concern in a scaled-down form or goes to liquidation.

The court authorized the Fort Myers, Fla.-based retailer to enter into the previously disclosed stalking horse bidder arrangement with liquidators Hudson Capital and Hyperams, which would serve as agents to liquidate substantially all assets, subject to a better liquidation or going-concern bid.

Under the deal, Hudson and Hyperams would pay 75.2% of the inventory value. An attorney for Robb & Stucky said at a Wednesday hearing that the sale of inventory would raise between $31 and $34 million, according to a local report on the News-Press.com website.

The judge also approved the $475,000 break-up fee should a better offer be approved.

Robb & Stucky, with 19 stores and an outlet in Florida, Las Vegas, Scottsdale, Ariz., and Plano, Texas, filed for Chapter 11 bankruptcy protection Feb. 18. The retailer has been battered by a weak housing market and weak business conditions since 2007.

The company also is saddled with debt, including $21.3 million owed to Bank of America (including $1 million for default interest and fees that was charged just before the filing); $13.5 million owed to Collier Enterprises, listed as CIRS Financing in court documents; and $2.5 million plus interest to Robb & Stucky CEO Clive Lubner, President Fred Berk and others connected to management for their 2009 cash infusion. All are noted as secured creditors.

Documents also show about $63 million in unsecured claims and list 14 industry suppliers owed $8 million among the retailer's top 20 unsecured creditors.

In October, in a move tied to a round of financing, Robb & Stucky installed Kevin Regan as chief restructuring officer, who according to his declaration, has advised numerous debtors in retail cases, including the now defunct Breuners Home Furnishings, Levitz and Storehouse chains.