Emporium selects liquidation bid.

Byline: Edward Russo The Register-Guard

Bankrupt Emporium has picked a liquidation firm to clear its shelves, at the same time rebuffing a bid from a Texas retailer that said it wanted to keep about half of Emporium's stores open.

It remains to be seen if Tuesday's decision ends interest by The Dunlap Co. of Fort Worth to operate 15 of the 34 Emporiums. More steps remain in the bankruptcy process for the Eugene-based clothing store chain, which is moving quickly to sell its inventory and other assets to pay creditors. Emporium and its parent firm, Troutman Investment Co., also want to sell rights to its store leases, and Dunlap may bid afresh at that point.

It remains unclear which of the 15 stores Dunlap has its eye on.

Today, Troutman and its creditors will ask U.S. Bankruptcy Judge Albert Radcliffe in Eugene to approve hiring Buxbaum Group LLC of Calabasas, Calif., to run Emporium's going-out-of-business sales, which could begin as early as Friday.

Dunlap, a 48-store chain, has said it wants to acquire 15 Emporiums and operate them under the Emporium name.

But Dunlap's bid was rejected because it was worth substantially less than the Buxbaum offer, said Troutman attorney William Potter of Eugene. He declined to provide figures before today's bankruptcy court hearing.

If Dunlap drops out, that may kill any chance for Emporium employees to keep their jobs after store shelves are cleared. No other retailer has expressed interest in acquiring any of the stores.

"We were really sorry," Dunlap Executive Vice President Eddie Martin said on Wednesday. "We looked at our bid as a way to keep people employed and some of the stores open."

Martin said Dunlap may still try to acquire leases to 15 Emporiums. Emporium is soliciting bids for the store leases by March 10, with Radcliffe scheduled to approve or reject those bids on March 17.

If Radcliffe today approves the Buxbaum hiring, the sales will begin in every Emporium on Friday said Buxbaum CEO Paul Buxbaum. "Everything in the stores will be on sale," he said.

Buxbaum agreed to pay Troutman 46.2 percent of the retail value of Emporium's remaining inventory. The retail value will be set by an independent firm; previous estimates have put it about $52 million. At that figure, the Buxbaum deal could yield about $24 million to Troutman Investment, which owes creditors a collective $30 million.

Gordon Brothers, a liquidator from Boston, Mass., submitted a bid, as did Dunlap, which made its offer with Hilco Merchant Resources, a liquidator from Northbrook, Ill.

The bidding took place at a closed-door meeting in a Portland hotel. Initial bids were made in the morning and were upped through the afternoon and into the evening.

Bidders increased the amount they were willing to pay Emporium by two tenths of a percentage point at a time, Buxbaum said.

Buxbaum's last bid was approved by Troutman and its largest secured creditor, Fleet Retail Finance of Boston, Mass., and a committee of unsecured creditors, including clothing manufacturers.

Still be sold are Emporium's long-term leases with below market rents, making them desirable to commercial real estate brokers, retailers and landlords wanting to regain control of their spaces.

Other Troutman assets include the Emporium-owned store building in Florence and the surrounding shopping center; an airplane and hangar at the Eugene Airport; and accounts receivable from firms that owe Emporium money.