(Updates with Lee Equity’s share in fourth paragraph.)
Sept. 13 (Bloomberg) -- Deb Shops Inc., a bankrupt retailer of clothing for teenage girls and young women, won court approval to sell virtually all its assets to lenders in exchange for $75 million in debt.
U.S. Bankruptcy Judge Kevin Carey in Wilmington, Delaware, today approved the sale after Deb didn’t receive any competing offers and canceled an Aug. 31 auction.
Ableco Finance LLC, as the agent for lenders, offered fair and reasonable value for the assets, said Damon P. Meyer, a company lawyer, at today’s hearing. Ableco owns most of the $129.9 million in debt with a first priority of repayment.
Lee Equity Partners LLC, the New York-based private-equity firm that bought Philadelphia-based Deb in 2007, is part of the purchasing group, according to a June 26 statement. Lee will own about 3 percent of the new equity, Meyer said.
The company listed debt of $270.1 million and assets of $124.4 million as of April 30 in Chapter 11 documents filed June 26. The retailer, which traces its roots to 1932, has about 318 stores in 44 states, court papers show.
The main case is In re DSI Holdings Inc., 11-11941, U.S. Bankruptcy Court, District of Delaware (Wilmington).
--Editors: Andrew Dunn, Mary Romano
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