No Takers for White Hen
OAK BROOK, Ill. -- White Hen Pantry Inc.'s struggle to find a buyer is adding to the financial stress of its parent firm, which is continuing to wrestle with Chapter 11 bankruptcy reorganization. Apollo Management, a New York-based investment fund that is supplying the money for the reorganization and holds an 83.9 percent stake in the company, warned Clark that it was in danger of losing additional funding, The Chicago Tribune reported today.
A failed auction for White Hen, a subsidiary of Clark Retail Enterprises Inc., set in motion a chain of events that had attorneys involved in the case scrambling for a solution in U.S. Bankruptcy Court in Chicago Tuesday. Without proceeds from the auction, Clark's creditors feared the owner of gas stations and convenience stores would be unable to pay its debts or its legal and consulting bills.
"I hope this isn't where White Hen becomes a white elephant," said Bankruptcy Judge John Squires.
White Hen Pantry, which was not part of Clark's bankruptcy petition, was put on the market in May in an effort to raise cash and alleviate Clark's financial strain. Clark hired investment bank William Blair & Co. to find a buyer for White Hen Pantry's stock. Clark acquired White Hen in 2000 for approximately $80 million.
"The auction is the most recent event in a series of extremely disappointing events that have occurred with respect to the borrower since commencement of the borrower's Chapter 11 case," Bruce Spector, an Apollo Management vice president, wrote in a July 22 letter to Jeffrey Jones, Clark's chief financial officer, The Tribune reported. "The financial performance of the borrower has continued to be poor, and the financial performance of White Hen Pantry has deteriorated significantly since the date of the loan agreement."
Attorneys in the case also contend that better marketing could have raised the profile of the White Hen Pantry sale. The company may consider putting the chain up for auction again.
A failed auction for White Hen, a subsidiary of Clark Retail Enterprises Inc., set in motion a chain of events that had attorneys involved in the case scrambling for a solution in U.S. Bankruptcy Court in Chicago Tuesday. Without proceeds from the auction, Clark's creditors feared the owner of gas stations and convenience stores would be unable to pay its debts or its legal and consulting bills.
"I hope this isn't where White Hen becomes a white elephant," said Bankruptcy Judge John Squires.
White Hen Pantry, which was not part of Clark's bankruptcy petition, was put on the market in May in an effort to raise cash and alleviate Clark's financial strain. Clark hired investment bank William Blair & Co. to find a buyer for White Hen Pantry's stock. Clark acquired White Hen in 2000 for approximately $80 million.
"The auction is the most recent event in a series of extremely disappointing events that have occurred with respect to the borrower since commencement of the borrower's Chapter 11 case," Bruce Spector, an Apollo Management vice president, wrote in a July 22 letter to Jeffrey Jones, Clark's chief financial officer, The Tribune reported. "The financial performance of the borrower has continued to be poor, and the financial performance of White Hen Pantry has deteriorated significantly since the date of the loan agreement."
Attorneys in the case also contend that better marketing could have raised the profile of the White Hen Pantry sale. The company may consider putting the chain up for auction again.