Under this groundbreaking agreement, 1903 Partners, the plan sponsor, and senior term lender, took center stage as the purchaser. They orchestrated a sale process, orchestrating the transfer of Soft Surroundings’ e-commerce platform and intellectual property to Coldwater Creek, a move likened to a game-changing chess play. The winding down of Soft Surroundings’ physical stores was expertly managed by Gordon Brothers Group, the provider of the company’s $18 million in debtor-in-possession financing.
The $22.7 Million Gamble
As the courtroom crackled with anticipation, counsel for 1903 Partners revealed the final consideration — a staggering $22.7 million. This sum included a captivating blend of $10 million in cash, a $10 million credit bid, the assumption of contract and lease claims, and a remarkable backstop for Soft Surroundings’ Chapter 11 expenses.
Brentwood Associates’ Generous Gesture
Cindi Giglio, representing Soft Surroundings, announced a generous gesture from the company’s parent, private equity firm Brentwood Associates. They pledged to deposit $400,000 into a trust earmarked for general unsecured claims. This trust will also serve as a safety net for any litigation claims that may not be covered by the sale or released under the plan.
A Satisfied Committee
Committee counsel Maeghan McLoughlin confessed that the committee had been initially skeptical about the rapid pace of the plan. They believed they had a strong case for litigation claims but ultimately decided that the settlement offered a better deal compared to the costs and risks associated with legal action.
Brentwood’s Bittersweet Victory
In a move that left many observers perplexed, Brentwood Associates’ counsel, Brian Schartz, acknowledged that while the plan was an “extraordinary result,” the firm had faced significant financial losses during the process.
Soft Surroundings Files for Bankruptcy : Judge’s Verdict
After absorbing the full scope of this intricate financial thriller, Judge Lopez issued his approval for both the Chapter 11 plan and the asset sale. Cindi Giglio confirmed that Soft Surroundings would waste no time in seeking to seal the deal.
