West L.A. investment bank B. Riley Financial Inc. missed out on a chance to snap up Foothill Ranch teen retailer Wet Seal Inc. in a bankruptcy auction.

The beleaguered mall fixture was auctioned off to Philadelphia’s Versa Capital Management in a deal reported to include $7.5 million in cash to unsecured creditors and $10 million in exit financing. The Philadelphia private equity firm also agreed to assume B. Riley’s $20 million debtor-in-possession facility and pay B. Riley a $625,000 breakup fee.

B. Riley in January provided the debtor-in-possession financing to Wet Seal in a deal that could have given B. Riley an 80 percent stake in the retailer following a reorganization. But Versa offered a sweeter deal in an auction that closed Thursday.

Steve Reiner, a managing director at B. Riley, confirmed the news, first reported by the Wall Street Journal. Reiner said the firm is pleased Wet Seal will be able to stay in business and said it was B. Riley’s initial financing that allowed Wet Seal to stay afloat.

“I think by most estimations, the company’s ability to survive in bankruptcy without such a partner was really de minimis,” Reiner said.

Versa Chief Executive Gregory L. Segall said the Wet Seal purchase was the culmination of a strategy that the firm has been working on for more than a year.

“Versa Capital is pleased to have prevailed in our effort to acquire Wet Seal’s business,” Segall said in a statement. “We have been assessing the dramatically shifting landscape in Wet Seal’s category for more than a year and determined that Wet Seal, among the many companies we evaluated, was best positioned in the marketplace, and thus we pursued this deal with determination.”