By: Paul Goldberg, Staff Writer
AUBURN, WA — Well known adult retail chain Peekay as well as its 16 affiliates and subsidiaries, has filed a petition for relief under Chapter 11 in the Bankruptcy Court for the District of Delaware.
Peekay currently operates brick & mortar adult stores such as Christals, Lovers, ConRev and A Touch of Romance which are mostly based on the West Coast. The parent company’s headquarters are in Auburn, Washington and operates 46 adult stores.
Founded in 1982 by Phyllis Heppenstall in 1982, was purchased by a group of equity investors in 2012. However over the past several years, the new owners have not had success in their efforts to restructor the stores nor were they able to sell off their brick & mortar outlets.
The bankruptcy filing lists Peekay’s assets between $10 million and $50 million and their liabilities between $50 million and $100 million. The company’s original debt of $38.2 million to its primary lenders has grown to almost $52 million, according to the filing.
The filing also includes plans for a stalking horse bid, which is an attempt by the debtors to test the market for the assets in advance of an auction of them. The bid is an attempt to maximize the value of the assets or avoid low bids during a court auction.
The First Day Declaration which was filed on yesterday, August 10, 2017 where officially Peekay enters Chapter 11 seeking a competitive sale process.
Chief Restructing Officer for Peekay Albert Altro stated that the company also attempted a public stock offering and had tentative sale agreements that never came to pass.
“No executable transaction came from these extensive marketing efforts, including the most recent letter of intent, which terminated in July 2017, precipitating these Chapter 11 cases,” wrote Altro.
The company worked hard to gain mainstream acceptance but due to the adult entertainment stigma, it didn’t pan out for Peekay.
“Sexual health and wellness products can be found on the shelves and are available on websites of some of America’s most prominent retailers, including Walmart and Amazon,” said Altro in his declaration.
Altro said that the goal is to satisfy the creditors, keep stores open and keep workers employed. The Chapter 11 case has been assigned to Judge Brendan L. Shannon.