Lillian Vernon proposes auction

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Internet and catalog retailer Lillian Vernon Corp. has found a potential buyer, but is seeking permission to hold an auction to attract higher bids, according to The Virginian-Pilot.

The Virginia Beach-based company filed for bankruptcy last month. An Illinois firm has reached a tentative agreement to purchase the company for $9.3 million. However, Lillian Vernon is asking the U.S. Bankruptcy Court in Wilmington, Del.,  for permission to hold an auction April 1.  The Bankruptcy Court would then review any potential sale on April 3, according to the proposal.

The company sought Chapter 11 bankruptcy protection in February. Citing court documents, the Pilot says Lillian Vernon owes about $15.5 million to Wachovia Bank, $11.6 million to unsecured creditors and $7.5 million to investors.

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