The week in bankruptcy kicks off Monday in Wilmington, Del., when Brookstone Holdings Corp. will go before a judge to seek approval of its bankruptcy-exit plan.
The centerpiece of the retailer’s plan is a $174 million bid to buy the company from Sailing Innovation US Inc.–a collaboration between Chinese investment firm Sailing Capital Overseas Investment Fund LP and Chinese conglomerate Sanpower Group, with a financing commitment from GE Capital.
The consortium’s bid trumped a $146.3 million offer by an affiliate of Spencer Spirit Holdings Inc., the parent of the Spencer’s and Spirit Halloween retail chains, which had served as the lead bidder at a June 2 auction.
Under the current plan, Brookstone’s unsecured creditors will receive at least $1.25 million, plus a chance to collect as much as $1.5 million more depending on how much money comes in from the sale. The plan also proposes to pay off the company’s approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring.
Brookstone’s new owners plan to keep open nearly all of the specialty retailer’s 240 stores and also expand the brand’s presence abroad, an attorney for Brookstone said at a bankruptcy-court hearing earlier this month.
Brookstone sought Chapter 11 protection in April, citing sales that have lagged since 2007. Outside of its stores, Brookstone also sells its merchandise, which includes travel electronics, massage chairs and other novelties, online and through a catalog.
Also Monday, Fairmont General Hospital will ask the Clarksburg, W.Va., bankruptcy court for permission to sell its assets to Alecto Healthcare Services LLC for $15.3 million.
Fairmont, one of the largest employers in Marion County, W.Va., tried to recover more money for creditors through a bankruptcy auction, but no other bidders came forward that met the criteria to beat Alecto’s offer.
Long Beach, Calif.-based Alecto has agreed to pay $15 million in cash for the 207-bed Fairmont, plus another $300,000 one year after the deal closes. Alecto also has committed to spending at least $5 million on upgrades and improvements at the hospital over the next two years.
Fairmont filed for Chapter 11 bankruptcy protection in September to restructure its balance sheet and affiliate with a larger health-care system to stabilize the ailing facility. According to court documents, Fairmont began experiencing financial trouble in 2008, including competition from other hospitals, reimbursement issues and problems with expensive labor contracts.
Later in the week, Mercantile Bancorp Inc. will seek confirmation of its bankruptcy-exit plan in Wilmington.
The Chapter 11 plan details how the company will distribute its assets among its creditors, such as the proceeds from the $23 million sale of its Mercantile Bank chain to Illinois-based United Community Bancorp. The sale, which the bankruptcy court approved last September, closed in December.
Tax and other high-ranking claims are slated to be paid in full under the plan, court papers show, while the company’s unsecured creditors would recover between 2.5 cents and 3.8 cents of every dollar they’re owed.
The unsecured creditors include investors in so-called trust-preferred securities issued by Mercantile. They are owed $61.9 million in principal and $14.1 million in interest, court papers show.
Founded in 1983, Mercantile owned six banks in Missouri, Illinois, Kansas and Florida in 2009 with $1.9 billion in assets. The Quincy, Ill., company sought Chapter 11 protection in June 2013.
-Stephanie Gleason and Jacqueline Palank contributed to this article.
Write to Sara Randazzo at sara.randazzo@wsj.com. Follow her on Twitter at @sara_randazzo.
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