- From LexisNexis® Mealey’s™ Daily Legal News.
A potential buyer of one of bankrupt Ritz Camera & Image LLC’s assets on April 22 filed a brief objecting to the Chapter 7 trustee’s motion seeking authorization to sell the asset, a piece of real property, to a different purchaser for $ 100,000 less (In Re: Ritz Camera & Image LLC, No. 12-11868, Chapter 7, D. Del. Bkcy.).
Ritz filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on June 22, 2012, its second bankruptcy in three years. It emerged from its first bankruptcy in 2009.
On Jan. 15, the bankruptcy judge ordered the proceeding to be converted to Chapter 7 liquidation because of Ritz’s inability to find a buyer for all of its assets.
On May 20, the Chapter 7 trustee moved in the Bankruptcy Court for authorization to enter into a property transfer agreement with an unnamed proposed buyer that was reportedly interested in purchasing a piece of real property that was part of the Ritz estate, for $ 1.8 million.
However, Big Industrial Ventures (BIV) LLC contends that on April 19 it had submitted an offer to the trustee seeking to purchase the same piece of real property for $ 1.9 million. Moreover, BIV contends that the transfer agreement it submitted to the trustee contained “substantially the same terms of sale” as the agreement that the other purchaser had offered.
BIV argues that under the transfer agreement the Chapter 7 trustee is “obligated to accept a higher and better offer” for the property as long as the terms of the sale are the same or better than those set forth in the agreement with the other purchaser.
Specifically, BIV contends that its offer is “higher and better” according to Article 6.2 of the transfer agreement. Furthermore, the sale of the property to BIV would maximize the proceeds received by Ritz’s bankruptcy estate, BIV says.
Moreover, BIV insists that it is a good faith purchaser and is entitled to the full protection of 11 U.S. Code Section 363(m).
Ritz is represented by Patrick J. Reilley of Cole Schotz Meisel, Forman & Leonard in Wilmington. BIV is represented by L. John Bird of Fox Rothschild in Wilmington and Michael G. Menkowitz and Jason C. Manfrey of the firm’s office in Philadelphia.