Spiegel Inc. received court approval to auction its Eddie Bauer corporate campus and use sale proceeds to pay unsecured creditors.
A hearing took place Tuesday in U.S. Bankruptcy Court for the Southern District of New York, a source familiar with the case said yesterday.
This follows last week's news that Microsoft agreed to pay $38 million for the property in Redmond, WA. Microsoft has provided a deposit of $1 million.
The auction and sale will occur Aug. 3, held by Judge Cornelius Blackshear in his court in New York, after which he will approve the winner based on the “highest and best” offer, the source said.
A deposit of at least $1.915 million must be submitted to the debtors by July 29. The initial bid must be at least $38.915 million. However, if there is no overbid, there will be no auction.
There is no mortgage on the property. The property includes three buildings on 20 acres. The space includes 230,000 square feet.
“Five entities have expressed an interest in the property, including Microsoft,” the source said.
A breakup fee of $665,000 — to be taken from the purchase price — would be paid to Microsoft if Spiegel sells the property to another buyer.
DM News reported the Microsoft purchase agreement last week and that Bauer — which has been on the block since last fall — simultaneously entered into a three-year lease for the same property. Terms of that deal include payment of $3 million for the first year, $3.12 million in the second year and $3.2 million for the third.
It is located across the street from Microsoft's headquarters.
