Bankruptcy court also approves sale of Carol Wright
On Dec. 17, a Newark, NJ, bankruptcy court gave the sale of Genesis Direct to GEInvestment the green light. While the closing of the sale was still pending at press time, Genesis president/CEO Harry Usher said he expected the deal to be sealed immediately after New Year’s. The cataloger had filed for Chapter 11 bankruptcy protection on Aug. 19.
According to Usher, GE Investment, which had been “roughly a 25% holder in Genesis Direct,” will now own 100% of the Secaucus, NJ-based sports merchandise and gifts cataloger. Despite Genesis’s 1998 sales of $225.3 million, “total cash price to the estate is $10.3 million,” Usher says. “But there are various assumptions of liabilities that make that price go up a bit.” The 12 properties acquired in the court-approved sale include The Edge Co. gifts and electronics catalog, and the Voyager.com and Proteam.com Websites.
As for his fate and that of Genesis’s 300 other employees, Usher says he doesn’t expect much to change. “I believe I’ll still serve as president and CEO of the company, though nothing is finalized. We’ve had employee defections in the company – some desired and some not – but as far as I know the employees will remain, and there are no plans to cease any catalog operations.”
In addition to the approval of the Genesis sale, Usher says the court on Dec. 17 approved the sale of the Carol Wright Gifts catalog to Dr. Leonard’s, a cataloger of health-related products. A previous attempt to sell Carol Wright, to an unnamed buyer, had fallen through in August. As for the terms of the current deal, “Genesis Direct will receive 4% of Carol Wright’s sales over the next four years,” Usher says. “And there was an advance of $4 million on those sales to the estate.”
Usher says he is pleased with the outcome of the sale. “Having GE Investment as the owner is great. It will give us the financial wherewithal we need in the next millennium.”