Posted: Nov 2, 2012 5:51 PM by Irina Cates - KPAX News
Updated: Nov 2, 2012 8:45 PM
MISSOULA - A U.S. Bankruptcy Court Judge approved the sale of Vann's Electronics and Appliance chain to a Texas-based company on Friday afternoon, meaning more than 150 employees across Montana should keep their jobs.
The judge issued his decision within about 10 minutes of the hearing's conclusion, and the deal between Vann's and its buyer McMagic Partners LP is set to close on Monday.
Vann's is more than $13 million in debt and filed for bankruptcy in early August and trustee Richard Samson has been working day and night to find a buyer for the electronics and appliances chain.
Vann's will be sold as a "going concern business" meaning a third party will take over.as opposed to a liquidation sale, Samson said.
"The going concern sale will probably net this estate an additional million dollars over and above a going out of business sale-that's the money that I need to pay to creditors in the case."
McMagic Partners offered to buy Vann's for $4.5 million, and the agreement means employees across Montana will keep their jobs and some creditors will be paid as soon as the deal closes.
"It will pay GE in full. It'll pay some of the other what we call purchase money creditors that have security interests and certain specific collateral, it will pay them. It will pay the administrative expenses related to the sale."
The remaining money will go to First Interstate Bank, which agreed to take a loss to make sure the sale of Vann's goes through.
"They're the ones that are coming up short on this sale, but they are a very community-minded bank. And I think at the end of the day they decided it was still in their best interest to go forward and they very much wanted to see the jobs preserved, not only in Missoula but across the state."
McMagic Partners' attorney declined to talk about what the company does, but Samson says this buyer operates companies across the nation, including electronics and appliance stores like Vann's.
The attorney for McMagic Partners declined to go on camera and would not confirm if anyone from the company will be in Missoula in the coming days.