Payless ShoeSource successfully emerged from its Chapter 11 restructuring with substantial liquidity after eliminating in excess of $435 million in funded debt. In April, Cortland Partners agented $80 million in term loans to support the company’s exit from Chapter 11.

Wells Fargo served as administrative agent for $385 million of DIP financing.

Following the completion of the company’s restructuring, Paul Jones will retire as CEO. The post-emergence board of directors will begin a search to identify a new CEO to lead Payless forward.

In the interim, Payless will be led by a newly appointed executive committee comprised of Chief Financial Officer Michael Schwindle, Chief Operating Officer Mike Vitelli, and headed by Martin R. Wade, III, chairman of Payless’ post-emergence board of directors and interim chief executive officer.

“We have accomplished our goals of strengthening our balance sheet and restructuring our debt load, positioning Payless to create substantial value for our stakeholders and achieve long-term success,” Jones said. “In a year where so many major retail companies have filed for Chapter 11 restructurings, Payless is the first to successfully emerge as a stronger and healthier enterprise for the benefit of its customers, employees, suppliers, business partners and lenders.”

During the process, Kirkland & Ellis served as legal advisor to Payless. Guggenheim Securities was its investment banker and financial advisor, and Alvarez & Marsal North America served as chief restructuring officer. Working with the management team, these advisors have ensured that the company entered and exited Chapter 11 in just over four months.

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Wells Agents $385MM Payless ShoeSource DIP Financing