Ritz Camera Centers, which filed for bankruptcy protection last month, is selling the business and/or assets of its Boater’s World Marine Centers to maintain Ritz’s “long-term viability and successful reorganization,” according to court documents.
In papers filed last month, Ritz said an auction is planned for 10 a.m. next Tuesday, with a hearing to approve the sale set for March 19.
A person answering the phone this morning at the company’s Beltsville, Md., headquarters had no comment.
Ritz Camera Centers, which operates 130 Boater’s World Marine Centers, filed for Chapter 11 bankruptcy protection Feb. 22 with U.S. bankruptcy court in Delaware.
“The debtor has also determined, in its business judgment, that the net proceeds of the sale of the Boater’s World assets will be maximized by soliciting bids for a ‘stalking horse’ purchaser and then conducting an auction to sell the Boater’s World assets to the bidder making the highest or best bid,” the company said in court filings.
A hearing to approve the bidding process is set for this afternoon. The deadline to submit bids is noon Monday.
Ritz said it anticipates some bids will include proposals for “store closing” sales for the assets located in Boater’s World locations, and proposes that any sales in connection with any bid would begin as early as the first day following the approval of such a transaction.
In a related court filing dated March 9, Panama City Peripheral, which leases property to Boater’s World in Florida, listed several objections to Ritz’s actions concerning Boater’s World.
It says Ritz Camera’s proposal does not afford the landlord “any of the protections they are entitled to under [the] Bankruptcy Code,” according to Panama City Peripheral.
“Further, Panama objects to the motion to the extent that the proposed sale and bid procedures do not allow landlords to bid on their individual leases,” court documents state. “Panama submits each landlord should be afforded the opportunity to credit-bid their respective leases.”
Panama also objects to the motion because “it allows for a ‘dark,’ or closed, store once the debtor’s agent completes the GOB sale. … Furthermore, a ‘dark’ storefront in a shopping center may imply financial distress at the center and may damage the overall image of the center.”
The more than 90-year-old Ritz Camera added the Boater’s World chain in the late 1980s and said it “proved to be a positive contributor to the company’s profitability for a number of years and generated a positive cash flow through 2007.”
“In the spring of 2008, however, the price of oil skyrocketed, leading to a sharp rise in the price of gas, and that, in turn with other macroeconomic factors, led to a sharp drop in the sales and profitability of the Boater’s World business,” chief restructuring officer and COO Marc Weinsweig said in court filings.
Weinsweig also cited a loss of revenues and profit margins from the diminution of the photo-finishing business as a cause for company’s financial problems.