Kent seeks buyers for assets County group looks to purchase building

BANGOR – Bankrupt Kent Inc. is pursuing buyers for its assets, and an Illinois children’s sleepwear manufacturer wants to buy most of them for $2 million.

Kent is in the process of winding down operations at its sole manufacturing plant in Fort Kent. More than a week ago, the company began laying off its 109 employees while preparing to shutter the building by the end of October.

The pending shutdown follows notification by Kent’s primary lender, Century Business Capital Corp., that it no longer will fund operations at Fort Kent.

“Kent has no other source of working capital with which to operate its business and therefore has no reasonable choice other than to seek to sell its assets in one or more transactions,” wrote Michael Fagone, a Portland attorney representing Kent, in documents filed late Friday in U.S. Bankruptcy Court.

Chicago-based Wormser Co. has signed a “letter of intent” to purchase certain pieces of equipment, finished goods inventory, raw materials and certain license agreements between Kent and Healthtex Apparel Corp., for $1.3 million in cash and other financial considerations. The deal is valued at $2 million, according to court documents.

Not part of the deal is Kent’s building in Fort Kent, which is being looked at by at least two interested buyers, and substantially all of its machinery, equipment, furniture and fixtures.

Officials from the town of Fort Kent and Northern Maine Development Commission form one of the groups looking to buy the building. The other buyer has not been publicly identified.

The town and development commission want to obtain the building and lease it to Creative Apparel of Belfast, which already is using part of the facility to manufacture military apparel.

“Based upon various circumstances, Kent has determined that one or more sales of assets is likely to maximize the return to Kent’s creditors and to increase the likelihood that there will not be significant loss of jobs in the northern Maine area,” Fagone wrote.

Wormser and Kent have not finalized a formal asset-purchase agreement, but the “letter of intent” lists deadlines to complete the sale. Wormser wants to be viewed as the “stalking horse bidder,” the company whose offer would have to be bested by other interested buyers during an auction in bankruptcy court.

According to court documents, the first bid would have to exceed Wormser’s offer by $150,000 and subsequent bids would have to be $50,000 or more.

If Wormser is outbid, it wants to be paid a $100,000 deal breakup fee.

Wormser seeks bankruptcy court approval of its bid terms by Aug. 12, with the auction or sale to take place before Sept. 1. If approved as the buyer, Wormser wants to finalize terms of the sale by Oct. 1.

A bankruptcy court hearing has been set for 11 a.m. Aug. 12, and any objections to Kent’s plan to sell some of its assets to Wormser are due in bankruptcy court by Aug. 7.

Six creditors have asserted liens against the properties that Wormser is looking to buy. They include Century, the Maine Department of Economic and Community Development, Key Corporate Capital Inc., Coastal Enterprises Inc., Finance Authority of Maine, the Libra Foundation, and NMDC.

About two weeks ago, Kent and Wormser signed an agreement that allows Wormser to complete a $4 million order from Costco Co. for infant- and toddler-size blanket sleepers. The final one-third of the order will be manufactured in the Dominican Republic.