Eddie Bauer Holdings, Inc. received approval from the U.S. Bankruptcy Court in Delaware of a number of key motions further facilitating the company's ability to continue normal operations as it moves forward with its sale process. Among other things, the company received final authorization to utilize its $100 million Debtor-in-Possession (DIP) loan facility from its existing revolving credit lenders, Bank of America, N.A., GE Capital Corporation and CIT Group/Business Credit, Inc., and to use its cash collateral to meet certain ongoing obligations to employees, customers, suppliers and other key constituents.
The company also received final Court approval to continue to pay its employees in the usual manner, including prepetition wages and salaries, and to pay independent contractor fees and expenses.
The Court had previously granted, in a hearing on June 18, 2009, interim approval for the Company to access $90 million of the $100 million DIP facility, along with interim or final approval of other relief requested by the Company in its “First Day” motions.
“With the Court's rulings, we continue on track to conduct business as usual as we proceed with our sale process,” said Neil Fiske, president and CEO. “The new DIP financing provides liquidity to meet our ongoing obligations, and we appreciate the strong support we have seen from our employees, customers and suppliers. We remain confident that we are on the right path to put Eddie Bauer in a stronger financial position for the future.”
On June 17, 2009, the company announced that it had initiated voluntary proceedings under Chapter 11 in the United States and the CCAA in Canada in order to pursue a sale of the business. The case is pending before the Honorable Mary F. Walrath in the U.S. Bankruptcy Court for the District of Delaware. The Company has entered into an asset purchase or “stalking horse” agreement with an affiliate of CCMP Capital Advisors, LLC (“CCMP Capital”) to buy the Company's assets, subject to an auction and Bankruptcy Court approval. The Court has set July 16, 2009 as the auction date, with a hearing to be held on July 22, 2009 to approve a sale.
Eddie Bauer's 371 stores, its catalog operations and its websites (www.eddiebauer.com and www.firstascent.com) are open and serving customers as usual.
Additional information on the filings and sale process is available on the Company's website at http://investors.eddiebauer.com.
About Eddie Bauer
Established in 1920 in Seattle, Eddie Bauer is a specialty retailer that sells outerwear, apparel and accessories for the active outdoor lifestyle. The Eddie Bauer brand is a nationally recognized brand that stands for high quality, innovation, style and customer service. Eddie Bauer products are available at 371 stores throughout the United States and Canada, through catalog sales and online at www.eddiebauer.com. Eddie Bauer participates in a joint venture in Japan and has licensing agreements across a variety of product categories.
SAFE HARBOR STATEMENTS
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” qualifiers such as “preliminary”, and similar expressions. Forward-looking statements are not guarantees of future events, and the Company can provide no assurance that such statements will be realized. Forward-looking statements contained in this press release are based on estimates and assumptions, which assumptions and estimates may prove to be inaccurate, and involve risks and uncertainties. Actual results may differ from those contemplated by such forward-looking statements as a result of a variety of factors, including adverse Bankruptcy Court rulings; a continued downturn in the national and global economies; unwillingness of the Company's vendors to accept orders or supply goods on acceptable terms; changes in consumer confidence and consumer spending patterns; increased levels of merchandise returns or gift card use not estimated by management; disruption in back-end operations; and the other risks identified in our periodic reports filed pursuant to the Securities Exchange Act of 1934, as amended, including the Company's Annual Report on Form 10-K for the period ended January 3, 2009 and quarterly report on Form 10-Q for the period ended April 4, 2009. The information contained in this release is as of July 8, 2009, and except as required by law, the Company undertakes no obligation to update any of these forward-looking statements.
Eddie Bauer Contacts:
Media:
Kekst and Company
Wendi Kopsick
(212) 521-4867
Investors:
Eddie Bauer Holdings, Inc.
Marv Toland, Chief Financial Officer
(425) 755-6310
SOURCE Eddie Bauer Holdings, Inc.