Sur La Table Gets Nod For $89M Ch. 11 Sale To PE Firm

A New Jersey bankruptcy judge said Wednesday that he would approve the nearly $89 million Chapter 11 sale of Sur La Table's assets to a private equity venture that bested a stalking horse offer and one other bidder during an auction earlier this month.

U.S. Bankruptcy Judge Michael A. Kaplan hailed the "tremendous" result of the Aug. 6 auction leading to an asset purchase agreement with SLT Lending JV, a joint venture between CSC Generation Holdings Inc. and Marquee Brands LLC. The deal will have SLT Lending buy the Seattle-based retailer's assets for $88.9 million and assume 50 store leases, which will save almost half of Sur La Table's brick-and-mortar presence.

Judge Kaplan said his approval was contingent on fine-tuning the proposed sale language to address concerns by landlords and other creditors with respect to the allocation of the final sale proceeds and other terms. However, the judge expressed confidence it could happen by Thursday in order to advance the sale's closing.

"I have confidence the parties can produce the proposed order with the language that meets the needs of the various constituencies," Judge Kaplan said.

Sur La Table previously had a $61 million asset purchase agreement in place from stalking horse bidder Fortress Investment Group, which agreed to $3 million in debtor-in-possession financing as the retailer grappled with more than $100 million in liabilities and store closure plans.

Then SLT Lending and another bidder, SLT Associates LLC, jumped into the auction on the Aug. 3 bidding deadline, according to a declaration by Sur La Table's liquidator George Haygood, president of SOLIC Capital LLC.

Per the proposed sales deal, SLT Lending agreed to assume Sur La Table's liabilities, with the exception of reimbursement for accrued payroll for retained employees, and it agreed to increase the number of assumed leases from 40 to 50, Haygood declared.

Fortress upped its ante during the auction to $86 million, which marked the second-highest offer and will serve as the backup bid, the declaration said.

In the announcement about its July bankruptcy filing, the upscale kitchenware purveyor said the process would result in a revitalized company poised to thrive in the post-COVID-19 environment. The privately held retailer operated 121 stores, most of which have reopened amid lifted pandemic restrictions.

Sur La Table began in Seattle's Pike Place Market in 1972 and was bought by the Behnke family in 1995. The company offers kitchenware brands and products tailored for cooking preparation and presentation.

In September 2011, alternative investment products provider Investcorp Bank BSC, which is now referred to as simply Investcorp, announced its acquisition of Sur La Table from private equity firm Freeman Spogli & Co. and the Behnke family.

Sur La Table is represented by Michael D. Sirota and David M. Bass of Cole Schotz PC.

SLT Lending is represented by Sean J. Kirby, Michael T. Driscoll and Justin Bernbrock of Sheppard Mullin Richter & Hampton LLP.

The U.S. trustee is represented by Lauren Bielskie and Jeffrey M. Sponder.

The case number is 3:20-bk-18368, in the U.S. Bankruptcy Court for the District of New Jersey