Vitamin World, a Holbrook-based retail chain that filed for bankruptcy protection in September, has received a $26 million cash bid from Latium Enterprises to acquire its remaining 150 or so stores, according to court filings made Friday.
The bid envisions keeping workers at some Vitamin World stores in their jobs, according to the filings.
Latium is also based in Holbrook and is engaged in financing, consulting, manufacturing and commercial property ownership and management, among other businesses, according to data from S&P Global Market Intelligence.
Vitamin World and Latium, which is owned by British entrepreneur Brian Kennedy, did not immediately return calls for comment.
The companies have agreed to a letter of intent on the deal but have not reached a definitive agreement.
The bid from Latium is subject to higher bids at a court-supervised auction.
“Almost all sales in bankruptcy require the sale to be subject to ‘higher and better’ offers,” said bankruptcy expert Marc Hamroff, managing partner of the Garden City-based law firm Moritt Hock & Hamroff.
“The stalking horse’s offer [in this case, Latium] becomes the offer over which future bidders must bid higher or better. ‘Higher’ usually means more in dollars but ‘better’ while also encompassing dollars also can look at non-monetary issues like job retention.”
Vitamin World plans to close some of its stores. Employees who do not work at stores having going-out-of-business sales will keep their jobs under the Latium bid, according to the court filings.
Latium also agreed to take on some of Vitamin World’s liabilities, including $1.2 million in vacation and sick days accrued by employees.
Under the letter of intent, Latium will be reimbursed for up to $400,000 in expenses, and will receive a 2 percent termination fee if another company buys Vitamin World.
However, most letters of intent are non-binding and subject to definitive written agreements, said Hamroff.
The letter of intent contemplates a closing date of Dec. 31.
Judge Kevin Carey of U.S. Bankruptcy Court in Delaware will consider approving Latium as the “stalking horse” purchaser, or lead bidder, for Vitamin World at a hearing on Friday.
Vitamin World was previously owned by Ronkonkoma-based Nature’s Bounty Co., which sold 90 percent of the chain in February 2016 to Manhattan private equity firm Centre Lane Partners LLC for about $25 million. The remaining 10 percent was owned by Vitamin World executives.