The Walking Company Holdings, Inc. filed a reorganization plan under which the company intends to keep 207 of its 214 (over 96%) current store locations open and pay off all of its debts and future obligations to trade creditors. It plans to exit Chapter 11 protection “sometime this
spring.”

In a court filing on Monday, the company said it had
negotiated new lease agreements with landlords of about 90 of
its 210 stores and that the move will generate annual cost
savings of about $3 million. The retailer had filed for bankruptcy protection in December,
with a plan to close almost half of its stores.

The Walking Co said it has obtained a commitment from an
investor group led by Richard Kayne of Kayne Anderson Capital
Advisors LP to invest $10 million to recapitalize the company. Wells Fargo Retail Finance has agreed to provide $30
million as exit financing.

“Today our company took a major step forward in the process of emerging from chapter 11. I want to commend all of the professionals working on behalf of the company — the unsecured creditors committee, landlords, financial institutions, and otherwise — on their diligence in achieving this result,” said Andrew Feshbach, CEO of The Walking Company, in a statement.

Feshbach further stated, “Though the plan still requires bankruptcy court approval and must go through the proper vetting process, it calls for an outstanding result for all stakeholders, including our landlords, vendors, lending institutions, bondholders, over 1500 employees and our shareholders.”

The Walking Company Holdings hopes that the reorganization plan will be accepted by all relevant parties and believes it is well positioned to emerge from chapter 11 sometime this spring. The company said it will be well positioned to continue
operations with substantially all of its current stores in
place if the economy improves over the next 18 months.

The company more than doubled in size from 2006 through 2008, by opening
about 140 new stores. It was forced to seek court protection
because it was unable to convince landlords to cut costs under
its leases in a difficult retail environment.