U.S. Bankruptcy Judge Alan Trust approved a roughly $133 million sale of Rubie's Costume Co. Thursday that aims to bring the retailer out of bankruptcy and save 400 jobs.
"There's really no dispute that this sale is in the best interest of these estates, their creditors and their employees," said Trust, who is presiding over the bankruptcy of Rubie's and five affiliated companies in the U.S. Bankruptcy Court for the Eastern District of New York. "The sale is approved with the modifications."
Attorneys for Rubie's and the retailer's creditors told Trust they were close to negotiating through concerns and would file paperwork finalizing modifications to the sale agreement by the end of Thursday.
A new company called Rubies II, LLC, is slated to purchase the retailer, which has corporate headquarters in Westbury and sales headquarters in Melville. Rubies II is a collaboration between Joel Weinshanker, chairman of the National Entertainment Collectibles Association Inc.; the investment advisory firm Atalaya; and the primary owners of the current company, the Beige family, court papers show.
Rubie's president Marc Beige noted in an affidavit — or written statement — that the sale would save about 400 jobs. He said the alternative would have involved selling Rubie's property and using the proceeds to pay its bills. Liquidation would have given creditors less compensation than the sale, which is expected to pay creditors about 55% to 60% of what they are owed, according to court filings.
Based on negotiations with Rubie's, creditors support the sale, according to George Angelich, an attorney for a committee that represents creditors like FedEx Corporate Services Inc. and party supply companies Amscan Inc. and Unique Industries Inc.
"The committee has been supportive since Day One of the debtors' efforts to reorganize to save Halloween, if you will," Angelich said. "Today’s outcome is a significant step in that direction."
The $133 million transaction is expected to help the company emerge from bankruptcy by covering $96 million in debt and $35 million in anticipated bills, court filings show.
Rubie's anticipates the sale closing next week, said its attorney, Frank Oswald.