Premium denim maker Rock & Republic has announced a rescue package of up to $48 million that would bring the company out of its Chapter 11 bankruptcy.
Rock & Republic, which filed for bankruptcy reorganization in April in New York, said in court documents filed Wednesday that it has received a nonbinding letter of intent from an entity called GR Acquisition LLC for a potential purchase of assets. A hearing is set for Sept. 28, when Rock & Republic is expected to ask for an addition 45 days of exclusivity to file a reorganization plan.
According to court documents, GR Acquisition would purchase Rock & Republic’s assets for $33 million, which could be increased to $48 million at the company’s option “plus the issuance of certainty equity interests.”
The high-end jeans maker, founded by bad-boy designer Michael Ball, is seeking to file GR Acquisition’s letter of intent under seal to protect certain terms of the deal.
The New York Post reported on Wednesday that New York investment firm Bluestar Alliance is behind the deal.
An attorney for Rock & Republic didn’t return requests seeking comment nor did the company.
Meanwhile, Rock & Republic also filed court documents Wednesday disclosing that it had reached a settlement in the bitter battle with its largest secured creditor. L.A. apparel executive Richard Koral.
Koral, who served as the exclusive U.S. distributor of Rock & Republic’s close-out and irregular goods, has paid $2.4 million that he owes the company, according to court documents. The settlement has yet to be approved by a bankruptcy judge.
The two parties were at war over a loan that one of Koral’s companies, RFK LLC, made to the jeans maker. Pending resolution of the dispute, Koral refused to sell the company’s remainders, preventing Rock & Republic from getting money it needed to emerge from bankruptcy. An attorney for Koral did not immediately return requests seeking comment.
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