A Chicago bankruptcy court extended
the deadline for objections to Hartmarx naming Emerisque as the stalking horse bidder until today. The stalking horse bidder is a potential purchaser selected by the bankrupt company to make the first bid. Naming a stalking horse bidder sets the bar for the purchase price of the company: other companies must then bid more than the stalking horse to win the bid. Negotiations are continuing for the deal points for Emerisque to buy the mens fashion company and avoid a liquidation by major creditor Wells Fargo.
The original deadline for objections was Thursday, but a last-minute extension was granted by the Chicago bankruptcy court as negotiations continue between the constituents, according to a well-placed source. Against that backdrop, there's been continuing chatter that Wells Fargo/Wachovia, Hartmarx's lender, is continuing to push for a liquidation of the clothing firm despite public pressure from union officials and lawmakers to allow the sale of the company as a single entity, preserving thousands of U.S. jobs in the process.
"Wells Fargo is pressuring the board to reverse its decision on naming Emerisque the stalking horse bidder,” said Bruce Raynor, the suspended general president of UNITE HERE, the union that represents Hartmarx workers. "[Wells Fargo's] logic is they want to liquidate the company, but now the spotlight of public opinion has been focused on them, they do not want to take responsibility for their conduct."
Raynor alleged the bank is attempting to pressure Hartmarx toward liquidation and "not take the blame for it."
Raynor is holding out hope that the Obama administration will step in and keep Wells Fargo from liquidating Hartmarx if the purchase deal doesn't work out, which seems extremely unlikely to us. A group of 43 House lawmakers sent a letter to Treasury Secretary Timothy Geithner asking him to intervene, but Geitherner has not responded. Wells Fargo continues to refuse to comment to the press until this all plays out.
