Bankrupt women's clothing retailer The Wet Seal LLC filed notice with the Delaware court late Tuesday indicating it had reached terms for an asset purchase agreement with a stalking horse bidder to purchase its intellectual property assets at auction.

In the court filing, Wet Seal said it had agreed to a $1.5 million cash deal with WS 2017 LLC to purchase the company's intellectual property and serve as a floor bid at an auction to be held Thursday morning for those assets. The asset purchase agreement provides for a 3 percent break-up fee to WS 2017 if its bid is topped.

In addition to the $1.5 million in cash being offered, WS 2017 has also pledged to take on some of Wet Seal's liabilities related to the intellectual property assets included in the asset purchase agreement. A minimum overbid price has been set at $1.65 million and must include substantially similar terms as the stalking horse bid.

Landlords at its closing stores have also objected to its cash plans, saying its proposed budget does not include stub rent that accrues post-petition, amounting to an unsecured loan of their property to Wet Seal while it earns money from the store-closing sales through February. If the company does become insolvent, they would likely not be paid for any rents due on their properties.

The landlords are represented by Leslie C. Heilman, Matthew G. Summers and Dustin P. Branch of Ballard Spahr LLP.
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