Case 18-11736-KG Doc 342 Filed 10/02/18 Page 1 of 15 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE -----------------------------------------------------------------x In re HERITAGE HOME GROUP LLC, et al., Debtors. 1 -----------------------------------------------------------------x Chapter 11 Case No. 18-11736 (KG) Jointly Administered RE Docket No. 217 Hearing Date October 23, 2018 at 1000 a.m. (ET) Obj. Deadline October 16, 2018 at 400 p.m. (ET) NOTICE OF SUPPLEMENT TO DEBTORS MOTION FOR ORDERS (I) (A) APPROVING BIDDING PROCEDURES FOR THE SALE OF DEBTORS INTELLECTUAL PROPERTY AND OTHER ASSETS RELATED TO THE BROYHILL, THOMASVILLE, DREXEL, DREXEL HERITAGE, AND HENREDON BRANDS; (B) APPROVING THE FORM AND MANNER OF NOTICES RELATED THERETO; (C) APPROVING A FORM OF ASSET PURCHASE AGREEMENT, INCLUDING BID PROTECTIONS; (D) SCHEDULING DATES TO CONDUCT AUCTION AND HEARING TO CONSIDER FINAL APPROVAL OF SALE, INCLUDING TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES; (II) (A) APPROVING THE SALE OF THE ACQUIRED ASSETS AND (B) AUTHORIZING ASSUMPTION AND ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES; AND (III) GRANTING RELATED RELIEF PLEASE TAKE NOTICE that, on August 31, 2018, the above-captioned debtors and debtors in possession (collectively, the Debtors ) filed the Debtors Motion for Orders (I) (A) Approving Bidding Procedures for the Sale Of Debtors Intellectual Property and Other Assets Related to the Broyhill, Thomasville, Drexel, Drexel Heritage, and Henredon Brands; (B) Approving the Form and Manner of Notices Related Thereto; (C) Approving a Form of Asset Purchase Agreement, Including Bid Protections; (D) Scheduling Dates to Conduct Auction and Hearing to Consider Final Approval of Sale, Including Treatment of Executory Contracts and Unexpired Leases; (II) (A) Approving the Sale of the Acquired Assets and (B) Authorizing Assumption and Assignment of Executory Contracts and Unexpired Leases; and (III) Granting Related Relief [Docket No. 217] (the Motion ). 2 0123646054.1 1 The Debtors in these chapter 11 cases, along with the last four digits of each debtor s tax identification number, as applicable, are Heritage Home Group LLC (9506); HH Global II B.V. (0165); HH Group Holdings US, Inc. (7206); HHG Real Property LLC (3221); and HHG Global Designs LLC (1150). The Debtors corporate headquarters is located at 1925 Eastchester Drive, High Point, North Carolina 27265. 2 Capitalized terms used, but not otherwise defined herein, shall have the meanings given to such terms in the Motion.
Case 18-11736-KG Doc 342 Filed 10/02/18 Page 2 of 15 PLEASE TAKE FURTHER NOTICE that, by the Motion, the Debtors requested Court approval of bidding procedures (the Bidding Procedures ) to govern the sale of the Debtors intellectual property and other assets related to the Debtors business of designing, manufacturing, sourcing, licensing, and selling home furnishings under the Broyhill, Thomasville, Drexel, Drexel Heritage, and Henredon brands (collectively the Assets ), which the Court approved by order dated September 25, 2018 [Docket No. 322]. Among the Assets being marketed for sale in accordance with the Bidding Procedures are certain land and buildings owned by Debtor HHG Real Property, LLC, located at 1925 Eastchester Road, High Point, North Carolina 27265 (the Owned Real Estate ). PLEASE TAKE FURTHER NOTICE that, prior to the Petition Date, the Debtors engaged Binswanger Southern (N.C.), Inc. ( Binswanger ) as real estate broker in connection with the marketing and sale of the Owned Real Estate, pursuant to the terms and conditions of an exclusive listing agreement (the Exclusive Listing Agreement ). 3 The Exclusive Listing Agreement provides, among other things, that Binswanger shall act as the Debtors exclusive listing agent for the Owned Real Estate and that Binswanger may earn a commission (the Commission ) in connection with any sale of the Owned Real Estate for the Debtors account. PLEASE TAKE FURTHER NOTICE that the Debtors hereby supplement the Motion (this Supplement ) to request authority (pursuant to the Sale Order) to engage Binswanger as their exclusive listing agent in connection with the marketing and sale of the Owned Real Estate and to pay any Commission that may be earned by Binswanger during these Chapter 11 Cases from the proceeds of any such sale, in each case in accordance with the terms of the Exclusive Listing Agreement. In support of this this Supplement, the Debtors submit the declaration of Daniel Cullen, Executive Vice President and General Counsel with Binswanger, attached hereto as Exhibit A (the Cullen Declaration ). PLEASE TAKE FURTHER NOTICE that any objections or responses to the relief requested in this Supplement must be filed on or before October 16, 2018 at 400 p.m. (ET) (the Objection Deadline ) with the United States Bankruptcy Court for the District of Delaware, 824 N. Market Street, 3 rd Floor, Wilmington, Delaware 19801. At the same time, copies of any responses or objections to this Supplement must be served upon the undersigned counsel to the Debtors so as to be received on or before the Objection Deadline. PLEASE TAKE FURTHER NOTICE THAT A THE HEARING TO CONSIDER THE RELIEF REQUESTED HEREIN WILL BE HELD ON OCTOBER 23, 2018 AT 1000 A.M. (ET) BEFORE THE HONORABLE KEVIN GROSS IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE, 824 N. MARKET STREET, 6TH FLOOR, COURTROOM NO. 3, WILMINGTON, DELAWARE 19801. 3 A copy of the Exclusive Listing Agreement is attached to the Cullen Declaration (as defined herein) as Schedule 1. 0123646054.1 2
Case 18-11736-KG Doc 342 Filed 10/02/18 Page 3 of 15 PLEASE TAKE FURTHER NOTICE THAT IF NO OBJECTIONS OR RESPONSES TO THIS SUPPLEMENT ARE TIMELY FILED AND RECEIVED IN ACCORDANCE WITH THIS SUPPLEMENT, THE COURT MAY GRANT THE RELIEF REQUESTED HEREIN WITHOUT FURTHER NOTICE OR A HEARING. Dated October 2, 2018 Wilmington, Delaware YOUNG CONAWAY STARGATT & TAYLOR, LLP /s/ Shane M. Reil Pauline K. Morgan (No. 3650) Kenneth J. Enos (No. 4544) Jaime Luton Chapman (No. 4936) Ashley E. Jacobs (No. 5635) Shane M. Reil (No. 6195) Rodney Square 1000 North King Street Wilmington, Delaware 19801 Telephone (302) 571-6600 Facsimile (302) 571-1253 Counsel to the Debtors and Debtors in Possession 0123646054.1 3
Case 18-11736-KG Doc 342 Filed 10/02/18 Page 4 of 15 EXHIBIT A Cullen Declaration 0123646054.1
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Case 18-11736-KG Doc 342 Filed 10/02/18 Page 14 of 15 Exhibit "A" Marketing Plan Owner HHG Real Property LLC Lead Market Specialist Property/Location 1925 Eastchester Drive Doug Faris High Point, NC 95,000 Sq. Ft. on 8.6 Acres Date February 5, 2018 Objective To successfully market HHG Real Property LLC's facility to qualified local, national, or international buyers. Strategy Creatively and aggressively promote the facility to targeted prospects, emphasizing the benefits and selling points of the property and location. Tactics CoStar, LoopNet, and Local/State Property Web Listings Market Specialist to upload property information to CoStar, LoopNet, and local/state economic development websites. No Charge Subtotal CoStar, LoopNet, and Local/State Property Web Listings No Charge CAD Drawings Redraw existing facility floor plans. Produce full size and 8 1/2" x 11" prints for distribution to market specialists as market support and for use in printed materials. Floor plan redraw $250.00 Subtotal CAD Drawings $250.00 "Featured Property" Listing Posted on Binswanger Website Access to property information via Binswanger website. Includes appropriate information about property such as detailed property description and photos. Unique page address displayed on brochures and other materials. Available online throughout term of agency. Listing $500.00 Banner ad displayed on Binswanger website No Charge Publish link to facebook and twitter No Charge Subtotal "Featured Property" Listing $500.00 Printed Property Marketing Postcard 1,000 Four color, postcards printed on gloss cover Photography $325.00 Design & layout $375.00 Printing $540.50 Subtotal Printed Property Marketing Postcard $1,240.50 E Brochure Campaign Develop an electronic brochure utilizing content from printed materials. Multiple distributions via email to qualified personal web addresses throughout term of agency. $425.00 Subtotal E Brochure Campaign $425.00 Page 1 of 2
Exhibit "A" Marketing Plan HHG Real Property, LLC (High Point, NC) Targeted Postcard Mailing Property marketing postcard mailed to key real estate decision makers selected from Binswanger's proprietary database of 30,000+ corporate contacts and other industry specific sources. TBD Case 18-11736-KG Doc 342 Filed 10/02/18 Page 15 of 15 1st wave mailing 500 prospects 2nd wave mailing 500 prospects Subtotal selected industry prospects 1,000 prospects Processing and Mailing Costs Processing & postage 1,000 pieces @ $0.57 $570.00 List purchases 1,000 pieces @ $0.16 $161.00 Total prospects 1,000 prospects Direct mail execution (include pulling data files, coordinating with vendor to ensure proper file conversions and to monitor the approval process) $100.00 Market specialist follow up by telephone and personal contact Subtotal Targeted Postcard Mailing $831.00 * Read in/format file; create inkjet/laser output file; sample dump per salesman; set up personalized letter; set up laser; clerical time; pull material; set up folder; set up inkjet machine; production set up; set up postage meter; prepare/deliver postal paperwork Laser printing and/or inkjet, fold, match, insert, meter, seal, tray and mail each piece. **US postage rates reflect the January 2018 increase, if postage rates increase prior to execution of plan, additional charges will be incurred. Program Management Overall supervision and management of the advertising campaign including regular contact with the client and market specialist. $100.00 Subtotal Program Management $100.00 TOTAL MARKETING PLAN $3,346.50 E Brochure 12.70% CAD's 7.47% Program Management 2.99% Featured Property Listing 14.94% Targeted Postcard Mailing 24.83% Printed Postcard 37.07% Fifty percent (50%) of the cost should accompany the signed agency agreement and will be credited against the above plan. The remainder will be invoiced monthly as the marketing program is executed. Figures are based on best information available at this date; adjustments may be necessary. Changes to the plan may require cost adjustments. Prices quoted are valid for 60 days, after which they are subject to change. APPROVED BY DATE Page 2 of 2