Harvey Begins Going-Out-Of-Business Sale
by Alan Wolf -- TWICE, 3/25/2008 11:10:00 AM
New York — A federal bankruptcy court here has given Harvey Electronics and its creditors the go-ahead to begin liquidation sales at the A/V chain’s five remaining stand-alone stores, and to sell off its name and other intellectual properties.
The store closings, which comprise substantially all of Harvey’s assets, will reduce the company’s retail footprint to two in-store shops located within ABC Carpet & Home, a Manhattan home furnishings emporium, and a nearby Bang & Olufsen store.
Harvey filed for Chapter 11 protection in December.
The going-out-of-business sales, which were sanctioned to begin immediately and run through May 31, will be conducted by Clear Bid and Hudson Capital Partners. Proceeds will go to YA Global; to a trust for unsecured creditors including Bang & Olufsen America, Monster Cable and D&M Holdings; and will be used to pay the liquidators and various legal and administrative fees.
According to court documents, Harvey lost nearly $744,000 last month on sales of $1.6 million. The company was acquired in 2006 in a cash-for-equity deal led by Trinity Investment Partners.
One of the last remaining A/V independents in the New York metro market, Harvey saw its fortunes sour in recent years as national big-box chains began saturating its trading area. Last year’s failed attempt to acquire MyerEmco, a last-ditch effort that would have extended Harvey’s footprint to Maryland, cost the company more than $1.2 million and the distraction of management. The cash hit, plus its inability to raise new equity capital, triggered the delisting of its common stock from Nasdaq, which led to loan defaults and its eventual Chapter 11 filing, the company said.
