Loehmann's strikes deal for quick bankruptcy exit
Wed Dec 15, 2010 8:41am EST
WILMINGTON, Delaware (Reuters) - Retailer Loehmann's ARCABL.UL said on Wednesday it reached an agreement with unsecured creditors that will allow the company to exit bankruptcy by February 18.
Loehmann Capital Corp's current owner, Istithmar, a unit of Dubai World DBWLD.UL, and Whippoorwill Associates Inc will backstop a rights offering that will invest $25 million in the company when it exits Chapter 11.
The company will also have a $33 million revolving credit facility with Crystal Financial LLC to fund its operations once it exits bankruptcy as well as a $7 million junior facility provided by Whippoorwill.
General unsecured creditors will receive their share of $2 million.
Loehmann's, which opened in Brooklyn in 1921, sells designer brands at steep discounts through its 60 stores. It has been unable to meet its debt load even as competitors such as TJX Cos Inc (TJX.N) and Ross Stores Inc (ROST.O) have reported robust sales.
(Reporting by Tom Hals, editing by Gerald E. McCormick)