A U.S. equity fund, Charlesbank Capital Partners, has emerged as the only bidder for most of the assets of the bankrupt Rockport Group, including its intellectual property rights for the Rockport, Aravon and Dunham brands, its sales operations in Europe and Asia and its other global wholesale and e-commerce businesses. Its 27 stores in the U.S, and 33 others in Canada are not included in the package and are being shut down.
Charlesbank has offered to pay $150 million through a subsidiary, CB Larathon Opto, in a deal set to close on July 31 that has just been approved by the bankruptcy court in Delaware, but it's still not clear whether i twill have to assume some of the group's liabilities and other obligations, valued at $287 million.
The bankruptcy court ruled this week that no provision of the asset purchase agreement releases any of the debtors or affiliates from any liabilities.
One of the main creditors is the Adidas Group along with its Reebok subsidiary, which sold Rockport to New Balance, owner of Aravon and Dunham, and other investors for $280 million in August 2015. Adidas had acquired Rockport in 2005 as part of its $3.8 billion takeover of Reebok.
Under a separate adversary proceeding, Adidas and Rockport will stand for a trial on Aug. 8 over their respective claims, unless they reach a settlement before then.
Adidas and Reebok currently hold claims of $54.3 million against the Rockport Group. Adidas is objecting to the transaction with Charlesbank without a proper refund because it incurred a variety of costs and lost benefits in the process of disentagling Rockport's operations from Reebok, which lasted for more than two years. In Europe, for example, the Adidas Group's offices in the Germany, the U.K. and some other countries were also taking care of Rockport, in addition to the Reebok brand, but the separation took longer than expected. Rockport set up a European office in the Netherlands.
Similarly, Rockport claims that its debts were partly caused by the separation. For example, Rockport suffered delivery delays because of the related closing of three factories by foreign contractors in October 2019.
Adidas has proposed to let the transaction proceed as long as its $54.3 million claim is placed into two escrow accounts while the matter is either litigated or settled with Rockport's secured noteholders, Berkshire Partners and New Balance, which are also the owners of the Rockport Group.
