Five days after the auction began, the highest bidder, at least in the opinion of FCS and some of its creditors, was--wouldn't you know it?--the very same entity controlled by the very same multi-hat-wearing Richard Jackson. Read some news accounts here and here.
The decision of FCS to declare the bid of FC Acquisitions the highest is not, however, the end of the story. There were other bidders, the well-known (well-known to me, anyway) liquidation firms of Hilco and Gordon Brothers, who assert that their bids were actually higher than the one from FC Acquisitions.
Such a result is not as peculiar as it might seem because no one is bidding a straight-up cash offer. Each of the bidders is offering to assume some existing debt and to pay the balance of the purchase price over time as the inventory and some other assets are sold. Thus, there will be a hearing before the bankruptcy court next week to decide whose bid is really the highest.
Given their intertwined relationship, it's not surprising that FCS claims that Jackson's bid is the best. It will be more interesting to see which sides which creditors take. Those with whom FC Acquisitions will continue to do business might be willing to take a hit now in the hope of getting more sales in the future. Other creditors, who won't be continuing to do business with the new Family Christian Stores, will fight for the highest and quickest cash payout. Still other creditors, like landlords, will split depending on the market value of the leases, how long they have to run, and how much they trust Jackson and the new Family Christian Stores to be able to honor the leases going forward.
So much fun it makes me want to quit teaching and get back into the practice of bankruptcy law. In any event, Stay tuned!