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Ex-Boscov's execs buy back chain
Lancaster New Era
Published: Nov 04, 2008
14:22 EST
Lancaster
By TIM MEKEEL, Staff Writer
Boscov's has changed horses in the middle of the bankruptcy stream.
The Boscov's store at Park City Center is shown in this 2000 file photo.
 
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The company said today it has agreed to be acquired by a group led by its former executives and owners, Al Boscov and Edwin Lakin.

A price was not disclosed.

As part of that move, Reading-based Boscov's has canceled its agreement to be acquired by Versa Capital Management, for about $290 million.

Versa's bid was to serve as a starting point of an auction of the 39-store department store chain, which includes a store at Park City Center.

By making the initial offer, Philadelphia-based Versa was to fill the role of what's called a "stalking horse," setting the pace for the bidding.

With the new deal, there will no longer be an auction.

Boscov's said it hopes to get the new deal approved by Bankruptcy Court Judge Kevin Gross at a Nov. 13 hearing in Wilmington, Del.

The company added that it believes it can complete the deal before the end of November.
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Boscov's was established by Solomon Boscov in 1911. Solomon Boscov's son Al Boscov and son-in-law Edwin Lakin ran the department store chain for decades, retiring several years ago.

They also transferred their ownership stakes to other family members.

With the deal disclosed today, Al Boscov and Edwin Lakin would become owners once again. Whether they'd have a role in management, though, was not immediately clear.

Edwin Lakin's son Ken Lakin, now the company's chief executive officer, said the new deal "maximizes the value of our business and the return to our creditors.

"It also provides certainty about the future direction of our company. As we move toward the completion of our restructuring process, Boscov's will be well-capitalized and have the resources to build a stronger and more competitive business," he said in a prepared statement.

The younger Lakin said the new deal has the support of the company's creditors.

Boscov's filed for bankruptcy Aug. 4, hurt by a downturn in consumer spending caused by the recession and a tight credit market, which limited its ability to borrow funds.

The mid-Atlantic chain immediately began closing 10 unprofitable locations.

In September, Boscov's said it needed to put itself up for sale promptly, to avoid liquidation. The company set up an auction process and struck the deal with Versa.

Shortly thereafter, the competing Boscov/Lakin bid surfaced. The auction was postponed several times as management weighed the two offers.

While other potential buyers expressed interest in Boscov's, the only two formal bids submitted were from Versa and the Boscov/Lakin group, which includes other family members, a Boscov's spokesman said.

The deal with Versa called for the firm to receive a $4 million break-up fee if it was not the successful bidder, under certain conditions. Boscov's contends those conditions were not met, the spokesman said.


Staff writer Tim Mekeel can be reached at tmekeel@LNPnews.com or 481-6030.

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good, now hopefully they can spice up the look of the park city store. Looks old. And doesnt match the look of the rest of the mall.
bdp135
I'm sorry to hear that the younger Lakin will be involved with this new ownership team.....he's the one that ran the store into the ground in the first place. The two old men built it up and the son tore it down by getting greedy and overexpanding.

BTW, bdp, I do agree with you.....the Park City store looks old and run down. They still have the light fixtures in the foyer from the original Gimbels store. They should have been investing money in their profitable stores, not expanding all over the place. I hope I don't hear excuse like I did before that it's the economy that forced the Boscov's bankruptcy.....looks like the Bon-Ton is doing fine.....and all that money invested in a nice new facade and store expansion.
Save-the-Land
So who exactly owns the company NOW? Other family members?

ImNorm
QUOTE (Save-the-Land @ Nov 4 2008, 04:20 PM)
I'm sorry to hear that the younger Lakin will be involved with this new ownership team.....he's the one that ran the store into the ground in the first place. The two old men built it up and the son tore it down by getting greedy and overexpanding.

BTW, bdp, I do agree with you.....the Park City store looks old and run down. They still have the light fixtures in the foyer from the original Gimbels store. They should have been investing money in their profitable stores, not expanding all over the place. I hope I don't hear excuse like I did before that it's the economy that forced the Boscov's bankruptcy.....looks like the Bon-Ton is doing fine.....and all that money invested in a nice new facade and store expansion.


'Looks' like Bon Ton is doing fine but will likely declare bankruptcy within the next year.
area man
I agree, it needs some work done to it. My mom and I have an ongoing joke because we always go in through Boscovs when we go to the mall. For like 20 years, it had the same broken, squeeky door and they finally removed it in the last year. We giggle everytime we go through it.
always_smiling
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