Bakers Footwear Group Inc. filed for bankruptcy protection amid falling sales. The company sought the protection of the Chapter 11 Bankruptcy Court in the Eastern District of Missouri.
As previously disclosed, prior losses and recent lower than planned sales have placed increased pressure on the company’s liquidity position and resulted in the company’s default under its senior credit facility. Subject to the bankruptcy process, the company intends to continue to pursue its previously announced restructuring plans, including the sale of up to 52 leases to Aldo U.S., Inc., closure of other stores, liquidation of inventory of closed stores and other actions.
Given the situation, the company is working collaboratively with its stakeholders and moving as quickly and as expeditiously as possible to ensure that value is maximized for all of the constituents and the Company can reorganize and emerge from bankruptcy.
All 215 Bakers stores in 34 states are open and serving customers. All other customer programs and policies, including those pertaining to coupons and refunds, remain in effect.
The company said it intends to work to restructure its business and its lending arrangements through the bankruptcy process. However, the Company can give no assurance as to the amount of recovery, if any, by its pre-filing creditors. The company does not anticipate any recovery by its common stockholders. The company has retained restructuring legal counsel, Bryan Cave LLP, and financial and restructuring advisors, Alliance Management, to assist in the process.
Pursuant to the Bankruptcy Code, the company plans to operate its business as Debtor-in-Possession (“DIP”). On October 3, 2012, in connection with the Chapter 11 case, the Company requested Court approval for a proposed credit agreement with Crystal Financial LLC (“Crystal”). Proposed terms of the credit agreement have been filed with the Court and a description of certain terms have been filed with a Current Report on Form 8-K.
Bakers has assets worth $41.9 million and debts worth $59.5 million, according to court documents.
