Eddie Bauer Completes Cross-border Restructuring and Acquisition by Golden Gate

On August 3, 2009, Everest Holdings LLC, a Delaware limited liability company controlled by investment funds managed by Golden Gate Private Equity Inc. (Golden Gate) completed its direct and indirect acquisition of substantially all of the assets of the specialty clothing retailer Eddie Bauer Holdings Inc. (Eddie Bauer) for US$286 million plus the assumption of certain of Eddie Bauer's liabilities. As part of the larger transaction, the Canadian Eddie Bauer business was acquired by Eddie Bauer of Canada Corporation, an affiliate of Everest Holdings, for US$11 million.

Eddie Bauer and CCMP Capital Advisors, a US private equity firm, negotiated the terms of a stalking horse purchase agreement, which was ultimately signed on June 16, 2009. With this agreement in hand, on June 17, 2009, Eddie Bauer and certain of its US and Canadian subsidiaries commenced voluntary bankruptcy proceedings under Chapter 11 of the United States Bankruptcy Code and the Companies' Creditors Arrangement Act (CCAA). In connection with those filings, a DIP financing facility in favour of Bank of America (as agent for a syndicate) was approved in the US proceedings, and the Canadian subsidiaries were authorized to continue borrowing from their parent company on the strength of a court-ordered DIP charge. A cross-border protocol was approved by the courts in both jurisdictions to permit court-to-court communications and joint hearings. On June 29, 2009, after a joint hearing, both courts approved a stalking horse asset purchase agreement with an affiliate of CCMP Capital Advisors LLC, and directed the holding of an auction in New York on July 16, 2009. After robust bidding at the auction, Everest Holdings LLC was declared the successful bidder, and on July 22, 2009, after a joint hearing, both courts approved the sale to Everest Holdings. That sale has now concluded, and claims processes are underway in both jurisdictions to assess claims and deal with appropriate distributions of proceeds.

Golden Gate plans to maintain a substantial majority of Eddie Bauer's stores and employees. The Eddie Bauer acquisition adds to Golden Gate's growing portfolio of apparel and accessories retail chains and direct marketing companies.

Golden Gate also arranged for a new asset based lending (ABL) facility to serve the ongoing liquidity needs of the acquired Eddie Bauer business. This ABL facility was provided by a lending syndicate led by Bank of America and GE Capital.

Latham & Watkins LLP represented Eddie Bauer in the US with a team led by David Heller (bankruptcy) and included Anthony Richmond, Joshua Dubofsky and Sarah Slayen (corporate); Josef Athanas, Caroline Reckler and Heather Fowler (bankruptcy); Ed Schwartz (litigation) and Jennifer Van Driesen and Scott Forchheimer (banking). Eddie Bauer's in-house counsel was Freya Brier, who was assisted by Karen Novotny. Goodmans LLP represented Eddie Bauer in Canada with a team led by Joseph Latham, which included Jay Carfagnini and Christopher Armstrong (insolvency); Fred Myers and Jason Wadden (litigation); Ken Herlin and Jonathan Freeman (real estate); John Connon and Linda Wu (corporate); David Nadler, Lisa Mantello and Grant Coad (banking); Joseph Morrison (employment); Jana Steele (pensions) and Glenn Ernst (tax).

Kirkland & Ellis LLP represented Golden Gate in the US with a team that included Jeffrey Hammes, Mikaal Shoaib, Jordan Zamir, Gary Holihan and Ben Beerle (corporate); James Stempel (restructuring); Samantha Good, Sonali Jindal, Fred Lim and Thomas O'Brien (finance); John Caruso and Wendy Tamblyn (real estate); Daneen Jachino (competition); Brian Land and Paul Tanaka (environmental) and Robert Zitko (employment).

Stikeman Elliott LLP represented Golden Gate in Canada. Stikeman Elliott LLP's team was led by Simon Romano (corporate) and included Savvas Kotsopoulos and Andy Gibbons (real estate); Maria Konyukhova (bankruptcy and insolvency); Craig Mitchell and Helve Hess (finance); Tess Lofsky (corporate); Paul Collins (competition); Lorna Cuthbert (labour and employment); Alan Kenigsberg (tax) and Andrea Boctor (pensions).

Alvarez & Marsal LLC were the financial advisors to Eddie Bauer, with a team led by Scott Brubaker and including Kay Hong and Robert Montgomery. Assistance in Canada was provided by Richard Morawetz and Amanda Favot of Alvarez & Marsal Canada ULC.

RSM Richter Inc. is the court-appointed monitor of Eddie Bauer in the Canadian CCAA proceedings. RSM Richter's team was led by Robert Kofman and included David Sieradzki.

Davies Ward Phillips & Vineberg LLP represented RSM Richter, with a team led by Jay Swartz and including Matthew Gottlieb and Natasha MacParland.

Weil, Gotshal & Manges LLP represented CCMP in the US, with a team comprised of Alfredo Perez and Julio Gurdian (bankruptcy); David Blittner, Kelly Dybala, Samuel Zylberberg, Alex Elser, Airi Hammalov, Jeffrey Friedman, Chrystal Dyer-LaRoche, Barry Jacobs, Lucas Spivey, Tracy Bookspan, Gregory Fennell, Aubree Corallo, Caroline Geiger (corporate); Michael Epstein (IP); Annemargaret Connolly and Matthew Morton (environmental); Scott Sontag, Amy Rubin, Mark Schwed, Eric Schecter (tax) and Kenneth Gavsie (litigation).

Fasken Martineau DuMoulin LLP advised CCMP Capital in Canada with a team led by Stephen Erlichman, and including, among others, Aubrey Kauffman and Stuart Brotman (insolvency); Neil Smiley and Dugan Edmison (real estate); Ronald Nobrega and Paul Casuccio (tax); Martin Fisher-Haydis (corporate); Huy Do (competition and Investment Canada); Ralph Nero (employment); Ross Gascho (pensions) and Mark Penner (intellectual property).

Riemer & Braunstein LLP represented Bank of America in the US. The DIP team was led by Donald Rothman and included Marjorie Crider. The ABL team was led by Kevin Simard and included Dawn Hinchliffe and Jaime Koff.

Osler, Hoskin & Harcourt LLP represented Bank of America in Canada in connection with the DIP, with a team led by Tracy Sandler (insolvency) and included Alexander Cobb (litigation).

Ogilvy Renault LLP represented Bank of America in Canada in connection with the ABL, with a team consisting of Kevin J. Morley, Arnold Cohen and Ciprian Gligor (finance) and Orestes Pasparakis (restructuring).