Delta Apparel, a former Counselor Top 40 supplier, is reportedly in line to be liquidated.
The Duluth, GA-headquartered company filed for bankruptcy this summer, and its stock was being delisted from the publicly traded NYSE American. Now, a lawyer for the company told a bankruptcy judge in Delaware this week that Delta Apparel’s activewear business will be liquidated.
Attorney Jeremy R. Johnson said Delta Apparel received some offers for elements of the activewear business, but no bidders wanted to take on the whole enterprise, whose operations included sales to the promotional products/apparel-decorating industry, according to a report from Bloomberg. In short, the interest isn’t enough to keep operations afloat, and liquidation is reportedly forthcoming.
Liquidation involves converting property or assets into cash or cash equivalents by selling them on the open market. Similarly, liquidation refers to the process of bringing a business to an end and distributing its assets to claimants.
The news is a bit better for Delta Apparel’s Salt Life. On Aug. 27, the company is scheduled to host an auction for the sun-and-surf apparel brand. Bloomberg said Johnson told the court that multiple bidders are keen to purchase Salt Life.
The front-runner is FCM Saltwater Holdings LLC, which is tied to investment firm Forager Capital Management. Delta has an agreement to sell Salt Life to FCM/Forager for $28 million unless a higher offer is received. Bids must start at $28 million.
In its bankruptcy filing, Delta Apparel listed $337.8 million in assets and $244.5 million in debt.
A run of disastrous financial results, executive departures and the appointment of a restructuring specialist had the writing on the wall that Delta Apparel was headed for bankruptcy prior to the late-June Chapter 11 filing.
The bankruptcy process hasn’t been cut-and-dried. Delta Apparel wants U.S. Bankruptcy Judge Laurie Selber Silverstein to approve a loan that will help the company fund restructuring, but certain unsecured creditors are against aspects of the proposed financing. A court date on the matter lies ahead.
