Eddie Bauer Holdings (fka EBHIQ)

[Time To Roll]

Google Asks Court to Vacate Eddie Bauer Sale Order
Posted by Randall Reese on Wednesday, October 21, 2009

Google Affiliate Network Inc. filed a motion in the bankruptcy case of EBHI Holdings, Inc. (formerly known as Eddie Bauer Holdings, Inc.) asking the court to partially vacate the order approving the sale of substantially all of Eddie Bauer's assets. Eddie Bauer filed for bankruptcy protection on June 17, 2009 and the court entered the order approving the sale on July 23, 2009.

As is commonplace in large bankruptcy asset sales, prior to approving the sale of Eddie Bauer's assets, the bankruptcy court entered a separate order on June 30th setting forth procedures that Eddie Bauer and other parties were required to follow with respect to the proposed sale. Among other things, the procedures order required Eddie Bauer to serve a notice upon each counterparty to a contract that was to be assumed by Eddie Bauer and assigned to the prospective purchaser of the assets. That notice provided the counterparty with the amount of pre-petition (or pre-bankruptcy) monetary obligations outstanding under the contract to be assumed which would be paid as a cure obligation by Eddie Bauer or the purchaser.

Google (and/or its predecessor entities) was party to a performance marketing agreement dated September 1, 2001 with Eddie Bauer and Eddie Bauer sought to assume and assign that agreement to the purchaser. As such, Eddie Bauer did serve Google with a cure notice, but Google now asserts that such notice was sent to a lockbox used solely for receiving payments and was not actually received by anyone at Google. Despite, according to Google, on-going discussions relating to Google's performance under the agreement occurring at the same time, Eddie Bauer did not provide any other notice to Google. Moreover, Google asserts that the notice understated Eddie Bauer's pre-petition obligations by over $125,000.

Google asserts that it has attempted to resolve this consensually with Eddie Bauer and the purchaser without success. As such, it is now seeking court intervention.

http://www.netdocketsblog.com/2009/10/google-asks-court-to-vacate-eddie-bauer.html