Home décor retailer Z Gallerie filed voluntary petitions to restructure under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
In conjunction with the Chapter 11 filing and subject to Court approval, Z Gallerie expects to have access to a $28 million debtor-in-possession financing facility from its existing secured lender, KeyBank. Subject to court approval, the DIP financing, which provides up to $8 million in incremental liquidity, combined with the company’s cash from operations, is expected to provide sufficient liquidity during the Chapter 11 process to maintain normal operations.
“We are pleased to have reached this agreement with KeyBank that will enable Z Gallerie to continue to execute its strategy and position itself for long-term success,” said Mark Weinsten, Z Gallerie CEO. “Z Gallerie has made significant progress on improving all facets of our operations, enhancing our customer service and scaling our E-commerce presence. Upon emergence, we will have a stronger balance sheet and the financial flexibility needed to compete in today’s dynamic retail environment now and for the long term.”
All Z Gallerie stores nationwide remain open and will continue to operate on normal schedules. Customers can also continue to shop online just as they have in the past. As part of the restructuring, the company filed a motion with the Court seeking approval to proceed with closing 17 stores. The company expects the Chapter 11 process to last approximately 4 months.
Kirkland & Ellis and Klehr Harrison Harvey Branzburg are providing legal counsel to Z Gallerie. Berkeley Research Group is serving as restructuring advisor, Lazard Middle Market as investment banker and Stretto as notice and claims agent.
Headquartered in Los Angeles, Z Gallerie provides sophisticated, accessible furnishings through its catalog, e-commerce site and 76 stores nationwide.
