Allan JonesCleveland, Tenn., businessman Allan Jones said today he will continue his efforts to buy the assets of the bankrupt Hardwick Clothes Inc., even though a federal court ruled Thursday that he can recover only about a third of what he expects to spend arranging the purchase in the event the assets are sold to another party.
Jones, founder and CEO of the payday lender Check Into Cash, has offered $2 million to buy the 134-year-old maker of men’s suits under a so-called “stalking horse” bid for an auction planned in May. Jones had asked to recover more than $312,000 he is spending to prepare for the purchase and hire a new CEO, if he is not the successful bidder at the auction. U.S. Bankruptcy Court Shelly Rucker on Thursday set a limit on such breakup fees of $100,000.
“While we were disappointed with the amount the court set as the reimbursement for the expenses we have incurred in the event we are not the successful bidder, we respect the very difficult decision the court was forced to make in light of the objection filed by the PBGC,” Jones said in a statement released today. “We accept Judge Rucker’s decision and plan to move forward in saving this company and its many loyal employees.”
Jones said he wanted to assure the 220 employees at Hardwick Clothes of his continued interest despite initial objections to the sale process by the company’s biggest creditor, the Pension Benefit Guaranty Corp.. The PBGC, the government agency that took over Hardwick’s underfunded pension plan, complained that the terms of Jones initial purchase plan were too quick to entice other bidders and too expensive for the company if he is not successful.
Jones maintained he is convinced Americans can still make suits profitably.