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Lillian Vernon Corp., which filed for chapter 11 bankruptcy protection last month, has reached a tentative agreement to sell the cataloger to an unnamed company for $9.3 million, according to documents filed last week in U.S. Bankruptcy Court in Wilmington, DE.

According to wire service reports, that company is PersonalCreations.com, a Lemont, IL giftware direct marketer.

But Vernon also said it plans to seek a judge's permission to hold an auction to see if any other companies wish to pay more. Those bids would be due March 31 and the auction would be held April 1 at a Wilmington law firm, according to Lillian Vernon's proposal.

Any sale agreement would go before the bankruptcy court for approval on April 3, the plan states.

Lillian Vernon said that a prompt sale of the company's assets is the best way to raise money to pay off debts. If a sale does not occur soon, the company may cease operations because of severe financial troubles, according to court papers.

"The debtors have nearly exhausted their cash resources and do not have additional investors willing to invest additional funds," the filing said.

After Lillian Vernon filed for chapter 11 protection, the company and its investment bankers Gruppo Levey and Co. began seeking potential buyers within the industry and among “strategic investment entities,” according to the filing.

After negotiations at that time with several potential buyers, Vernon determined that the un-named buyer “represented the best opportunity to maximize the value of their assets,” the filing continued.

Last month, Vernon and several related entities filed for Chapter 11 protection at the U.S. Bankruptcy Court for the District of Delaware. Those entities include Lillian Vernon International Inc., LV Catalog Holding Corp., LVC Retail Corp., the Corporate Solution Inc., Everyday Celebrations Inc. and Rue de France Inc. (Direct Newsline, Feb. 21).