Filene's Basement back on the block

"The original winner is out," Chera said in an interview yesterday.

Men's Wearhouse, the men's dress retailer based in Texas, did not return calls seeking comment.

Crown Acquisitions, the New York retail real estate firm that made the opening offer of $22 million in a joint venture with the Chetrit Group, is planning to raise its bid at tomorrow's auction. Chera said he planned to compile the bid overnight but would not release details.

Syms, which failed with its $50 million proposal at last week's auction, also intends to enhance its bid, to $63 million for 22 stores, according to Alan Cohen, the chief restructuring officer for Filene's Basement. The deal, a joint venture with New York real estate firm Vornado Realty Trust, would close immediately.

The Men's Wearhouse bid stated the transaction would not close until the fall and was dependent on several contingencies, including getting shared services from shoe discounter DSW, which had previously provided those back-office operations.

"The creditors prefer to have a more immediate closing," Cohen said. "We don't know who else will show up on Friday."

Syms, the New Jersey offprice merchant, did not return messages seeking comment. Vornado, which owns the Downtown Crossing property where the shuttered flagship for Filene's Basement is located, also did not return calls.

The reopening of the auction comes a day after Syms and Crown Acquisitions filed objections in court, challenging last Friday's process, calling it a "sham" and "brazen noncompliance."

In separate court filings on Tuesday, Syms and Crown objected to the timing of the Men's Wearhouse proposal, saying it was submitted after the deadline, involved a reorganization rather than an asset sale, and included a closing date months later than the bidding procedures allowed.

After nine hours of bidding, K&G Acquisition Corp., a Men's Wearhouse affiliate, emerged as the successful bidder for the Burlington-based Filene's Basement, weeks after the landmark discount merchant filed for Chapter 11. The $62 million purchase price covered the assets, including 17 to 20 of the store leases, inventory from all 25 existing locations, and leases for the headquarters in Burlington and a distribution center in Auburn.

An additional $5 million was earmarked if Filene's Basement prevails in litigation over rent disputes with Vornado Realty Trust.

"It was a travesty," Crown Acquisitions said in a court filing about last Friday's auction.

Jenn Abelson can be reached at abelson@globe.com.