(Bloomberg) -- Beachwear brand Salt Life has multiple bidders interested in rescuing the company from bankruptcy but the company’s related active wear business will be liquidated, a lawyer said in court Thursday.
No bidders were willing to take on all of the Delta side of the company, attorney Jeremy R. Johnson told the judge overseeing the company’s insolvency case in Wilmington, Delaware. A limited number of offers came in for pieces of the Delta business, not enough to save the operations, Johnson added.
“The good news is we’re not going to be canceling the auction,” Johnson said in court. “The bad news, we don’t have bidders for everybody.”
The parent of both sides of the business, Delta Apparel Inc., was in court seeking approval of a loan to help fund the company’s restructuring. US Bankruptcy Judge Laurie Selber Silverstein put off a final decision on the loan so the company could negotiate with a committee of unsecured creditors that opposes certain details of the financing. Both sides will return to court later this month.
Delta Apparel will hold an auction on Aug. 27, Johnson said. Selling the Salt Life business will save about 240 jobs, he added.
Delta Apparel filed for bankruptcy June 30, blaming an increase in cotton prices and other raw materials as well as lower demand for its products, according to court papers.
The company has agreed to sell its Salt Life brand to Forager Capital Management LLC for about $28 million unless a higher offer comes in, according to a regulatory statement. The bid will set the floor price for the Salt Life brand at the auction.
Delta Apparel listed $337.8 million in assets and $244.5 million in debt in its Chapter 11 bankruptcy petition.
The case is Delta Apparel Inc., number 24-11469, in the US Bankruptcy Court for the District of Delaware.
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