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Scouler & Company has been engaged as Interim Chief Financial Officer for a $65 million seller of sporting goods and apparel through catalogs, internet channels, direct team selling and through a retail store.
Private equity firm Sun Capital Partners Inc. will take Contessa Premium Foods Inc. out of the Chapter 11 freezer for more than $51 million.
Chief Judge Peter Carroll of the U.S. Bankruptcy Court for the Central District of California in Los Angeles signed an order July 1 approving the sale of the frozen-food maker to Sun Capital.
The two sides expect the sale to close by July 15, debtor counsel Craig Wolfe of Kelley Drye & Warren LLP said. Sun Capital affiliate Premium Foods Acquisition Inc. was the highest bidder at the debtor’s June 28 auction with a $28 million cash bid plus the assumption of liabilities, court papers said. Wolfe valued the total bid in excess of $51 million.
The bidding was complicated by the assumption of leases at the debtor’s environmentally friendly food processing plant in Commerce, Calif., according to Contessa’s financial adviser, Dan Scouler of Scouler & Co. LLC. The buyer assumed leases for the plant as well as various pieces of equipment, Scouler said, adding that if the leases had not been assumed through the sale, they would have been a burden on the estate if they had been rejected, because the lessors would have received claims against the estate.
Sun Capital was named as the stalking-horse bidder the night before the auction, Wolfe said. He would not provide the exact initial bid of the Boca Raton, Fla., firm, but the attorney said that during the auction, the bid increased by several million dollars.
The auction was “very spirited” and lasted several rounds, Wolfe said. The auction began at 9:30 a.m. and was not completed until 12 hours later, Scouler said. CJ Omni Inc. and CREO Capital Partners, also competed in the auction.
Sun Capital bought substantially all of the debtor’s assets including its intellectual property and its seafood and convenience meals businesses.
Contessa’s seafood business sources and distributes frozen shrimp products procured from Southeast Asia. The convenience meal business develops and produces restaurant-quality frozen meals, fruits and vegetables procured from Asia, Central America, Mexico and the U.S.
“The Contessa management team has built a great business, centered around best-in-class food quality and environmental friendliness,” Sun Capital vice president Jared Wien said in a statement. “Contessa’s already strong market position in the frozen seafood category and its state-of-the-art manufacturing and processing capabilities have enabled the company to capitalize on the growing demand for high-end frozen seafood and convenience meals.”
Contessa’s estate will now complete its wind-down through a liquidating plan, Wolfe said.
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