After a three-day hearing on the matter, U.S. Bankruptcy Judge Martin Glenn on Wednesday approved bidding procedures for the sale of Grubb & Ellis, and a stalking-horse bid from BGC Partners Inc. worth about $50 million.  Qualified bids are due by March 20, with an auction set for March 21, to be held in the Manhattan office of law firm Togut, Segal & Segal. Judge Glenn will hold a sale hearing on March 22.

Grubb & Ellis, a commercial-real-estate-services firm, filed for Chapter 11 protection on Feb. 20 with plans to sell its assets to BGC in a Section 363 sale. But unsecured creditors objected to the terms of BGC’s offer – consisting of a $30 million credit bid – arguing that the expedited schedule for the sale did not allow them a “fair opportunity” to evaluate the proposed bidding procedures and “the propriety of the stalking horse credit bid.”

BGC acquired its secured notes for less than par on Feb. 17, just days before Grubb’s Chapter 11 filing, according to Zazove Associates, Grubb’s largest, single unsecured creditor. (See, “Grubb & Ellis unsecured creditors object to bidding procedures,” LCD News, Mar. 1, 2012).

Under the terms of amended asset-purchase agreement, BGC’s stalking-horse bid now consists of its $30 million credit bid, plus $15 million in cash and the principal amount of the $4.8 million debtor-in-possession credit facility it provided to Grubb. Should BGC lose the auction, it will be entitled to a break-up fee of $330,000, plus 1.5% of the purchase price, and expense reimbursement of up to $300,000. – John Bringardner