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CHICAGO -- Clark Retail Enterprises Inc., the parent company of White Hen Pantry convenience stores, got a judge's approval Tuesday to try again to sell White Hen's stock. An initial auction of the shares produced one bidder, but the offer was inadequate, said Shalom Kohn, a Chicago attorney who represents Clark's pre-petition lenders.
The chain of White Hen convenience stores was not part of its parent company's bankruptcy filing in October, but its shares were put up for sale to ease Clark's financial woes.
Clark in April 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.
Earlier this month, 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.
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.
"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 Chicago Tribune reported Aug. 13. "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."