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February 6, 2009 1:17 PM

Fortunoff in Bankruptcy Again, and Getting Discount from Sidley

Posted by Zach Lowe

If it seems like you just read about Fortunoff filing for bankruptcy, it's because you did--almost exactly one year ago. Back then, Skadden, Arps, Slate, Meagher & Flom partner Sally Henry helped guide Fortunoff through a Chapter 11 process that ended with its sale to the private equity firm NRDC Equity Partners for $110 million, court records show. NRDC owns the Lord & Taylor brand. At the time, NRDC said they were getting a bargain (they pegged the company's true value at $439 million). It immediately pumped $10 million into the crystal/china/jewelry chain so that its merchandise would soon land in L&T stores. 

But after a year of dismal sales and a depressed holiday shopping season, Fortunoff filed for Chapter 11 again Thursday. (Filing for Chapter 11 twice in such a short span is known as a "Chapter 22" in the business, lawyers say.)

Sidley Austin advised NRDC on its Fortunoff last year, court records show. Having firmed up that relationship, Sidley now is advising on the new Chapter 11. Sidley partner Lee Attanasio is leading the firm's team; she was not immediately available for comment. 

According to its filing, the top Sidley partners on the case will charge a maximum of $1,000 per hour--a slight discount from the $1,100 max they are charging the Tribune Co. That was believed to be a record hourly rate for bankruptcy counsel until Kirkland & Ellis trumped it by $10 in the Tronox Inc. Chapter 11, according to Bloomberg.

The Fortunoff family founded the company in Brooklyn in 1922. Today it employs about 1,800 people in 20 stores in the tri-state area, court filings say. Fortunoff does big wedding business--about one-third of registering brides and grooms in the tri-state New York City area use its registry service, according to filings in the bankruptcy case.

"It's a very sad day," says Henry of Skadden. "So many young brides had their first houseware and tabletops from Fortunoff."

NDRC is seeking a buyer for the company, according to court filings and this Newsday round-up that contains a timeline of the company's history.

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