Bakers Footwear Group, which filed for bankruptcy in October, stated in a regulatory filing that it’s continuing discussions with the unsecured creditor committee and lender Salus Capital Partners on the proposed liquidation or sale of the company.
Bakers lost its debtor-in-possession financing when it failed to meet a debt covenant when its liquidation of 150 of its then 213 stores wasnt as successful as planned. On Jan. 2, the retailer asked the U.S. Bankruptcy Court for permission to liquidate the company if it cant find a buyer.
Bakers said in a filing Monday that as of Dec. 29, it had an outstanding balance on its credit facility, including a term loan, of $2 million and that lender Salus Capital has notified the company it’s in default, applied the default interest rate and refused to fund any further inventory purchases. Salus hasnt technically taken any action to accelerate the debt or terminate the agreement and remains in discussions with Bakers regarding a possible forbearance agreement.
“Although the Company will attempt to wind down its business in an orderly fashion over the next couple of months, the Company may be forced into Chapter 7 or an even earlier liquidation,” according to the filing.
