rtpr_8k-011209.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): 01/10/2009
RETAIL
PRO, INC.
(Exact
name of registrant as specified in its charter)
Commission
File Number: 0-23049
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Delaware
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33-0896617
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(State
or other jurisdiction of
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(IRS
Employer
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incorporation)
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Identification
No.)
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3252
Holiday Court
Suite
226
La
Jolla, California 92037
(Address
of principal executive offices, including zip code)
(858)
550-3355
(Registrant’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Retail
Pro, Inc. (“Retail Pro” or the “Company”) has been in discussions with its
secured lenders Laurus Master Fund, Ltd. (In Liquidation)
(“Laurus”) and Midsummer Investment, Ltd. (“Midsummer” and,
collectively with Laurus, the “Existing Lenders”) regarding the Company’s
defaults under its existing loan agreements. As a result of such
discussions, as of January 9, 2009, the Company and its subsidiaries Page
Digital Incorporated, IP Retail Technologies International, Inc. and Sabica
Ventures, Inc. (collectively, the “Sellers”) entered into an Asset Purchase
Agreement with the Existing Lenders and an affiliate of Laurus, Valens Offshore
SPV II, Corp. (“Valens” and, together with the Existing Lenders, the
“Purchasers”) under which the Sellers have agreed, subject to the conditions set
forth in such agreement, to sell all or substantially all of their assets used
in connection with their business to the Purchasers (or their nominee) in a sale
conducted under Bankruptcy Court supervision. As required by the
Bankruptcy Code, the sale of the assets to the Purchasers will be subject to
overbidding by any other prospective purchasers.
The
assets to be acquired under the Asset Purchase Agreement include the Sellers’
corporate office in La Jolla, California and facilities in Folsom, California
and Englewood, Colorado, and is expected to consist of leasehold improvements,
tangible personal property, intangible property, leases and contracts, accounts
receivable, inventory and business records. The consideration to be
paid for the purchased assets, subject to certain adjustments, is expected to
consist of (a) a credit bid by the Purchasers of the aggregate principal,
accrued interest, and fees, costs, and other outstanding charges owed by the
Company, (b) a cash amount equal to $400,000, (c) the amounts necessary to cure,
up to certain limitation, pre-bankruptcy monetary defaults under certain
contracts, and (d) assumption of certain liabilities. The sale of
assets is subject to a number of conditions, including Bankruptcy Court
approval. In addition, the Purchasers are entitled to terminate the
Asset Purchase Agreement upon the occurrence of certain events or defaults by
the Sellers.
Also as
part of its discussions with the Purchasers, the Company, as of January 9, 2009,
the Sellers entered into a debtor-in-possession financing arrangement (the “DIP
Facility”) with Midsummer and Valens (collectively, the “DIP Lenders”) under
which the Company may borrow up to $1,643,000 to finance operations during its
Chapter 11 proceedings. Indebtedness incurred under the DIP Facility
accrues interest at the fixed annual rate of 14%, matures on the earlier of (a)
the closing of the sale of assets or (b) March 27, 2009, and is secured by
substantially all of the assets of the Sellers and by a pledge of the capital
stock of the Company’s subsidiaries. The DIP Facility is subject to a
number of conditions, including Bankruptcy Court approval. In
addition, the DIP Lenders are entitled to terminate the DIP Facility upon the
occurrence of certain events or defaults by the Sellers.
Item
1.03. Bankruptcy or Receivership
On
January 10, 2009, Retail Pro, Inc. (“Retail Pro” or the “Company”) and its
wholly owned subsidiaries Page Digital Incorporated, IP Retail Technologies
International, Inc. and Sabica Ventures, Inc. filed voluntary Chapter 11
bankruptcy petitions with the United States Bankruptcy Court for the District of
Delaware in Wilmington, Delaware. The proceeding has been assigned
case no. 09-10087 (PJW). The Company plans to seek joint
administration of the cases.
The
Company will continue its ordinary course of business operations and will
operate as a debtor-in-possession within the bankruptcy
proceeding. These bankruptcy filings were necessitated by the
Company's inability to secure new equity or debt financing on terms acceptable
to the Company's current secured lenders. The Company hopes to use the
protections provided by the Chapter 11 process to consummate the transactions
contemplated by the Asset Purchase Agreement. The Company believes that the
Chapter 11 filing provides it with the best chance of preserving the value of
its business assets and maximizing the return to all of the stakeholders of the
Company.
Certain statements contained in this
document may be deemed to be forward-looking statements under federal securities
laws. The Company intends that all such forward-looking statements be
subject to the safe harbor created under such laws. Such
forward-looking statements include, but are not limited to, statements regarding
(i) the continuation of the Company’s business operations; (ii) the continuation
of the Company’s status as a debtor in possession; and (iii) the Company’s plans
to use a Chapter 11 bankruptcy to sell its business. The Company
cautions that these statements are qualified by important factors that could
cause actual results to differ materially from those reflected by the
forward-looking statements contained herein. Such factors include,
but not are not limited to, (a) the willingness of the Company’s secured lenders
to continue to fund its operations; (b) the Company’s ability to remain in place
as debtor in possession; (c) the Company’s ability to successfully complete the
bankruptcy sale process and resolve claims with creditors; (d) other risks of
Chapter 11 bankruptcy proceedings; and (e) as detailed in the Company’s SEC
reports.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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RETAIL
PRO, INC. |
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Date:
January 12, 2009
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By:
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/s/ Donald
S. Radcliffe |
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Donald
S. Radcliffe |
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President
and Chief Executive Officer |
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