The main Karmaloop lender is offering to buy the online retailer in a credit bid of $13 million in lieu of cash, according to court documents.
Karmaloop owes its secured senior lenders, led by Comvest Partners, about $30 million. The $13 milion sale price would be credited against what Karmaloop owes.
In all, Karmaloop has racked up about $80 million in secured and unsecured loans, and $19 million in trade debt.
A group associated with Comvest Partners has agreed to be the “stalking horse” bidder in the bankruptcy auction process, and have not asked for break-up fees or expense reimbursement in hopes of encouraging other bidders to come forward.
Karmaloop, which filed for bankruptcy protection last month, is hoping to keep the business going post-bankruptcy and is requesting an expedited sale process.
The company is asking the deadline for bids be set for May 13, with the auction held on May 19.
Karmaloop’s 2014 revenue declined to $80 million last year, down from $120 million in 2013, according to The Boston Globe.
The company has approached hundreds of potential investors and buyers over the past few years, but no deal has come to fruition.
Executive Edition members can read our detailed story about what led to Karmaloop’s bankruptcy.
