Theproposed auction and sale of Sarasota, Fla.-based cleared a key hurdleas U.S. Bankruptcy Judge Catherine Peek McEwen on Oct. 3 issued an order approvingthe procedures and schedule for the transaction to proceed.

Theschedule, which came over the objection of the representative for the largestunsecured creditors of Bank ofCommerce Holdings Inc., calls for qualified bids to be submitted nolater than 12 p.m. ET on Oct. 31, with an auction to follow on Nov. 2 and ahearing to approve the winning bid on Nov. 4. The order appears to addresscertain of the concerns raised in the objection, though not necessarily in themanner suggested.

Privateinvestor P. Byron DeFoor submitted the stalking horse bid for the outstandingshares of Bank of Commerce — an agreement that contemplates consideration of$750,000, a $1 million purchase price for $5 million in outstanding banksubordinated debt and an equity contribution to recapitalize the bank in anamount of up to $4.7 million in a transaction to be conducted under Section 363of the U.S. Bankruptcy Code.

Anycompeting bid must be on terms that Bank of Commerce Holdings determines to beon the same or better terms as the agreement with DeFoor, including aggregateconsideration of at least $2.05 million. The aggregate consideration consistsof the sum of the payment to the debtor and the purchase price for the banksubordinated debt. Overbidders must also submit a deposit of $300,000. Ifqualified overbidders emerge and an auction is convened, the minimum biddingincrements will be at least $100,000.

Tothe extent the bankruptcy court fails to approve a sale to DeFoor, including asa result of the emergence of a competing bidder, he would be eligible for a feeequal to the lesser of $200,000 or the amount of his actual expenses. Bank ofCommerce Holdings had originally proposed a breakup fee of $200,000, withoutregard to the amount of expenses incurred.

Theorder requires Bank of Commerce Holdings to consult with , the subsidiary thatserves in a trustee capacity in connection with at least $10.2 million inprincipal amount of subordinated debt issued to two statutory trusts by theholding company, on the conduct of the auction. It also directs the company togive Wilmington Trust access to the due diligence data room and to any othermarketing materials.

WilmingtonTrust had objected to, among other things, the breakup fee, arguing that itshould be reduced to no more than $15,000, given that only $750,000 of theconsideration is due to accrue to the estate's benefit. The trustee also arguedin the objection that Bank of Commerce Holdings should consult with itregarding all aspects of the bidding and sale process.

Regardingthe limited objection of HoldCo Advisors LP, which is seeking to collect a feefor services it allegedly performed on Bank of Commerce Holdings' behalfbeginning in 2012, the order indicates that all of the firm's rights will bepreserved.