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.
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.
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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