Versa Capital Set to Acquire Wet Seal

The Wet Seal Inc. will be under new ownership. An affiliate of private-equity firm Versa Capital Management, Mador Lending LLC was selected as the successful bidder for the teen retailer in a bankruptcy-court-approved auction late Thursday, according to Delaware bankruptcy-court records. The selection of Versa is still subject to bankruptcy-court approval, which is slated for March 18. Versa, which specializes in distressed investments, beat out stalking-horse bidder B. Riley Financial Inc. The Foothill Ranch, Calif.-based retailer filed a voluntary petition for Chapter 11 bankruptcy court protection in Delaware, in late January. At the time, it inked a $20 million debtor-in-possession financing facility with B. Riley, with the plan for B. Riley to become the new owner, with an 80 percent stake, after converting the financing into newly issued common stock of the restructured firm. That’s now changed given the selection of Versa as the successful bidder, and the private-equity firm will need to obtain court approval for replacement DIP financing at Wednesday’s hearing. Proceeds from the auction are slated for use to pay the claims of Wet Seal’s unsecured creditors and for the satisfaction of administrative expenses and priority claims. Versa isn’t exactly new to the retail and apparel space. It owns Sport Chalet, Eastern

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