Judge rules Hartmarx bidding to move ahead

A flurry of conversations over the weekend between representatives from embattled clothing manufacturer Hart Schaffner & Marx, its creditors led by Wells Fargo & Co., and its potential savior, London-based Emerisque Brands/SKNL North America, led to a resolution Monday that turned employees' mood from depressed to elated.

Hartmarx's future looked grim Friday after Wells Fargo rejected as too low Emerisque's $85.5 million offer to purchase the company. But spirits soared Monday when U.S. Bankruptcy Court Judge Bruce W. Black approved Emerisque's bid to save Hartmarx from bankruptcy. The company, which filed for Chapter 11 protection in January, owes creditors more than $114 million.

"We made a significant step," said Joseph Costigan, an official with Workers United, the union representing Hartmarx's approximately 1,000 Illinois workers, most of whom work at the company's Des Plaines plant.

Des Plaines officials have been working with local legislators to increase the pressure on Wells Fargo and Hartmarx.

"It's unfortunate that Wells Fargo rejected the first formal bid," Des Plaines Mayor Marty Moylan said. "We felt it was unwarranted. We felt that Emerisque made a responsible bid. We are hoping and encouraging Wells Fargo to accept the second bid."

Sixth Ward Alderman Mark Walsten said the suitmaker has been leaving the city out of the loop when it comes to a decision that can affect 600 jobs in town.

Wells Fargo opposed Emerisque's initial bid on the grounds that it didn't offer the bank enough cash, said Robert Ginsburg, financial analyst with Service Employees International Union, an umbrella organization for Workers United. After renegotiating the bid's structure, Emerisque will now offer about 72 percent of the $114 million owed to Wells Fargo and the other creditors, company officials said. The new deal translates to more cash for Hartmarx creditors, about $82 million, plus a $5.5 million note.

Emerisque's bid "sets the floor" for future bids, Costigan said. Which means any other bidder would have to exceed Emerisque's bid of $82 million.

The judge set June 19 as the last day for other bidders to submit offers. If other bidders surface, an auction will be held June 24, with June 25 as the date for final approval of the sale.

• Daily Herald staff writer Madhu Krishnamurthy and news services contributed.