• 15
  • November
    2010

According to The Wall Street Journal, Loehmann's Holdings Inc. filed for Chapter 11 protection on Monday in U.S. Bankruptcy Court in Manhattan. The company is based in New York City, where it was founded in 1921. The company sells designer clothing at discounted prices. Like many retailers, Loehmann's has been struggling with declining sales. According to the WSJ, Loehmann's chief operating officer said that the company has also been hindered financially by a "highly leveraged capital structure."

In its bankruptcy petition, the company listed between $100 million and $500 million in both debts and assets. Loehmann's is filing for Chapter 11 bankruptcy in order to reorganize their finances and reduce their debt. The company has implemented a plan that it believes will have it back on its feet by early 2011.

The company negotiated a deal with its Dubai-based owner Istithmar World and Whippoorwill Associates Inc., the company that handles its discretionary funds and accounts. Those two companies have agreed to invest $25 million in Loehmann's after it emerges from bankruptcy. Crystal Financial will put up $45 million to finance the bankruptcy. Loehmann's is waiting for its unsecured creditors to file claims before it knows how much they will pay them.

Source:

Loehmann's Files for Bankruptcy (The Wall Street Journal)