Plans for the sale of bankrupt Chicago-based suit maker Hartmarx seem to be stumbling after its chief lender Wells Fargo says it opposes a US$119m deal reached last week with Emerisque Brands and SKNL North America - a unit of Indian apparel maker S Kumars Nationwide Ltd.

In a statement on Friday (29 May), Wells Fargo said the bid is too low, "fails to provide adequate value to Hartmarx's lenders," and does not guarantee that Hartmarx's current business will continue to run after the acquisition.

Hartmarx accepted the Emerisque-led bid after filing for Chapter 11 bankruptcy protection in January 2009.

The offer consists of US$70.5m in cash, a junior secured note with a face value of $15.0m, and the assumption of certain liabilities worth $33.5m.

But Wells Fargo claims working capital adjustments will reduce the cash element of the deal to less than $56m - which is around half of the $114m Hartmarx owes the lenders.

The banking group also accuses Emerisque of planning to sell some Hartmarx factories and its distribution centres within three months of the acquisition.

But labour unions believe Wells Fargo's opposition to the deal is part of its intent to force Hartmarx into liquidation. 

Wells Fargo has already faced the wrath of Hartmarx workers, local officials and lawmakers who are furious that the bank - which received a US$25bn taxpayer bailout at the end of last year - seems fixed on a bankruptcy closure of the suit maker instead of seeking a buyer who will reinvest in the firm.

Hartmarx makes business, casual and golf apparel under its own brands, including Hart Schaffner Marx, Hickey-Freeman and Palm Beach, and under licensing agreements including Austin Reed, Burberry men's tailored clothing and Ted Baker.

The company employs almost 3,000 people in the US.

UK-based private-equity firm Emerisque has helped turn around international brands such as Puma, Lee Cooper and Ben Sherman.