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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 2, 2021

 

CHRISTOPHER & BANKS CORPORATION

(Exact name of registrant as specified in its charter)

  

Delaware   001-31390   06-1195422
(State or other jurisdiction of incorporation)   (Commission File Number)   (IRS Employer Identification No.)

  

2400 Xenium Lane North Plymouth Minnesota 55441
(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (763) 551-5000

 

Not Applicable

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

  

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

  

Item 2.01 Completion of Acquisition or Disposition of Assets.

  

On March 2, 2021, Christopher & Banks Corporation (together with its subsidiaries, the “Company”) closed on the sale of all or substantially all of the assets used in the conduct of its business, including its retail store business and its e-Commerce business, to ALCC, LLC (“ALCC”). Pursuant to the terms of the previously disclosed Asset Purchase Agreement, which was filed on a Current Report on Form 8-K on February 1, 2021, ALCC has designated iMedia Brands, Inc. (“iMedia”) as a Buyer Designee, to assume certain of the assets and liabilities related to the operation of the business, while ALCC will retain the intellectual property assets and liabilities.

 

The Company values the consideration provided under the Asset Purchase Agreement at approximately $24.6 million, which includes the assumption of certain liabilities and, to the extent cash on hand is not sufficient to satisfy certain budgeted wind down expenses, a closing cash payment subject to adjustments. ALCC, an affiliate of Hilco Merchant Resources, is the lender under the Company’s term loan facility and the program agent under the Company’s secured vendor program.

  

On January 28, 2021, the Company entered into the Asset Purchase Agreement with ALCC, subject to higher and better offers. No other parties submitted a bid for the assets, and as a result, ALCC held the winning bid for the sale of the assets described above. The auction was canceled. The Asset Purchase Agreement was approved by the Bankruptcy Court on February 23, 2021.

  

On January 28, 2021, the Company, after a bankruptcy auction, entered into the Asset Purchase Agreement with ALCC as the winning bidder at such auction, for the sale of the assets described above. The Asset Purchase Agreement was approved by the Bankruptcy Court on February 23, 2021.

  

Item 9.01 Financial Statements and Exhibits.
   
(d) Exhibits:
   
2.1 Notice of Designation of Buyer Designee dated March 2, 2021

 

 

  

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

     
  CHRISTOPHER & BANKS CORPORATION
     
Date: March 2, 2021 By: /s/ Keri L. Jones
    Keri L. Jones
     
    President and Chief Executive Officer
         

 

 

NOTICE OF DESIGNATION OF BUYER DESIGNEE

 

This NOTICE OF DESIGNATION OF BUYER DESIGNEE (this “Designation Notice”) is dated as of March 1, 2021, and is delivered by ALCC, LLC, a Delaware limited liability company, as buyer (the “Initial Buyer”), and IMEDIA BRANDS, INC., a Minnesota corporation (“Buyer Designee”) to CHRISTOPHER & BANKS CORPORATION, CHRISTOPHER & BANKS, INC., and CHRISTOPHER & BANKS COMPANY, debtors and debtors in possession (collectively, the “Sellers”).

 

R E C I T A L S:

 

WHEREAS, Initial Buyer is party to that certain Asset Purchase Agreement, dated as of January 28, 2021 (as amended, restated, supplemented and/or modified and in effect, the “Asset Purchase Agreement”), by and between Initial Buyer and Sellers, pursuant to which the Sellers have agreed to sell, transfer and assign to Initial Buyer (or any other person(s) designated by the Initial Buyer as a “Buyer Designee” thereunder) all of the Acquired Assets (as defined in the Asset Purchase Agreement), and Initial Buyer (or any other person(s) designated by the Initial Buyer as a “Buyer Designee” thereunder) has further agreed to assume certain Assumed Liabilities (as defined in the Asset Purchase Agreement);

 

WHEREAS, a sale to the Initial Buyer pursuant to the Asset Purchase Agreement was approved by the U.S. Bankruptcy Court, District of New Jersey, pursuant to that certain order entered on February 23, 2021 ECF No. 266 (the “Sale Order”);

 

WHEREAS, in accordance with the terms of the Asset Purchase Agreement, Initial Buyer desires to designate iMedia Brands, Inc., a Minnesota corporation, as a “Buyer Designee” with respect to those Acquired Assets and Assumed Liabilities (each as defined in the Asset Purchase Agreement) identified in Exhibit A hereto (collectively, the “Designated Assets/Liabilities”).

 

DESIGNATION OF BUYER DESIGNEE

 

1.            All capitalized undefined terms used in this Designation Notice shall have the same meaning as in the Asset Purchase Agreement.

 

2.            Initial Buyer hereby designates iMedia Brands, Inc., a Minnesota corporation, as a “Buyer Designee” with respect to the Designated Assets/Liabilities.

 

[Remainder of Page Intentionally Left Blank] 

[Signatures Follow Next Page]

 

 

 

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first above written.

 

  BUYER:
     
  ALCC, LLC
       
  By: /s/ Daniel Rubin
  Name: Daniel Rubin
  Title: Managing Director

 

Signature Page to Buyer Designation and Purchase Agreement

 

 

 

 

IN WITNESS WHEREOF, this Notice of Designation has been signed by as of the date first written above.

 

  INITIAL BUYER:
   
  ALCC, LLC
       
  By:  /s/ Daniel Rubin
    Name: Daniel Rubin
    Title: Managing Director

 

  BUYER DESIGNEE:
     
  IMEDIA BRANDS, INC.
       
  By: /s/ Tim Peterman
    Name: Tim Peterman
    Title: CEO

 

Signature Page to Buyer Designation Notice

 

 

 

 

THE FOREGOING IS ACKNOWLEDGE AND AGREE TO:

 

SELLER:  
   
CHRISTOPHER & BANKS CORPORATION  
   
BY: /s/ Keri Jones  
  Name: Keri Jones  
  Title: President and CEO  

 

CHRISTOPHER & BANKS, INC.  
   
BY: /s/ Keri Jones  
  Name: Keri Jones  
  Title: President and CEO  

 

CHRISTOPHER AND BANKS COMPANY  
   
BY: /s/ Keri Jones  
  Name: Keri Jones  
  Title: President and CEO  

 

Signature Page to Buyer Designation Notice

 

 

 

 

EXHIBIT A

 

DESIGNATED ASSETS/LIABILITES

 

Acquired Assets

 

1. All inventory owned by Sellers, including the Merchandise, designated and/or held for sale through the E-Commerce Platform;

2. All Furnishings and Equipment associated with the E-Commerce Platform, including Furnishings and Equipment at the Sellers’ corporate office and attached distribution center identified by the Company in email or other communication no later than seven

(7) days after the Closing Date; provided, further, that the Company shall be obligated to remove all such FF&E so identified by no later than March 29, 2021; 

3. All Transferred Contracts identified in Schedule A hereto;

4. All Assumed Leases identified in Schedule B hereto;

5. All prepaid expenses of any Seller related to a Transferred Contract or Assumed Lease; provided, that prepaid expenses related to any Contract which is not an Transferred Contract, or any Lease which is not an Assumed Lease, are expressly excluded from the Designated Assets/Liabilities;

6. All Permits issued to, or for the benefit of, any Seller relating to the operation of the E-Commerce Platform, and all pending applications or filings therefor and renewals thereof;

7. All third-party warranties, refunds, rights of recovery, rights of set-off or counter-claim and rights of recoupment of every kind and nature for the benefit of, or enforceable by, any Seller in each case to the extent arising from or relating the Designated Assets/Liabilities (in each case limited to the extent their transfer is permitted by applicable Law);

8. All books, records, manuals and other materials (in any form or medium and wherever held) relating to the operation of the E-Commerce Platform;

9. All of Sellers’ telephone and fax numbers utilized in connection with the Sellers’ operation of or relating to the E-Commerce Platform;

10. All other tangible assets related to the E-Commerce Platform or any similar e-commerce platform owned, operated, or controlled by any Seller (provided that to the extent any such assets include rights to which Sellers are entitled pursuant to any Contract or Lease, such rights shall only be included in the Acquired Assets if such Contract is a Transferred Contract or such Lease is an Assumed Lease); and

11. All of those guarantees, warranties, indemnities and similar rights in favor of the Sellers to the extent arising from or relating to the Designated Assets/Liabilities, in each case to the extent conveyable.

 

B. Assumed Liabilities

 

1. All Cure Costs under any Assumed Leases or Transferred Contracts;

2. All Liabilities under any Assumed Leases or Transferred Contracts, in each case solely to the extent such Liabilities arise from and after the Closing Date;

3. All liabilities arising under any Contract or Lease related to the post-Closing operation of or relating to the E-Commerce Platform prior to the time that such Contract(s)

 

 

 

 

Lease(s) are designated as “Rejected” in accordance with Section 2.6(b) of the Asset Purchase Agreement; 

4. All Liabilities arising solely out of the ownership or operation of any Acquired Asset included in the Designated Assets/Liabilities after the Closing Date;

5. Sellers’ obligations for unused and accrued “paid time off” or “PTO” for those E-Commerce Platform employees listed on Exhibit F to the Asset Purchase Agreement;

6. All of Sellers’ obligations for pre-Closing incurred-but-not-yet-reported health care reimbursement amounts (“IBNR”) for Sellers’ employees in an amount not to exceed $950,000 in the aggregate;

7. All of Sellers’ post-petition, pre-Closing obligations owing to Radial, Inc. (“Radial”) as of the Closing Date, in an aggregate amount not to exceed $2,400,000, plus all obligations owing to Radial from and after the Closing until the Radial Contract is rejected;

8. All of Sellers’ obligations for post-Closing payroll and benefits to those E-Commerce Platform employees utilized by Company post-Closing pursuant to the Transition Services Agreement; and

9. All other liabilities and/or reimbursements required under the Transition Services Agreement related to the post-Closing operation of or relating to the E-Commerce Platform.

 

5 

 

 

Schedule A

 

Transferred Contracts

 

To be designated post-closing pursuant to the terms and conditions of the Asset Purchase Agreement

 

6 

 

 

Schedule B

 

Assumed Leases

 

To be designated post-closing pursuant to the terms and conditions of the Asset Purchase Agreement

 

7