The Bon-Ton Stores filed voluntary petitions for a court-supervised financial restructuring under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware.
The company is currently engaged in constructive discussions with potential investors and its debtholders regarding the terms of a financial restructuring plan. Bon-Ton intends to use this court-supervised process to explore potential strategic alternatives to maximize value for the benefit of its stakeholders, which may include a sale of the company or certain of its assets as part of the plan of reorganization.
The company’s stores, e-commerce and mobile platforms under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates are open and operating as usual. The company is closing 47 stores in 2018, four of which closed in January and one store that is near completion, along with 42 additional stores at which closing sales began on February 1, 2018 and will run for approximately 10 to 12 weeks. A full list of those locations can be found on its investor relations website.
Bon-Ton received a commitment from its existing ABL lenders, led by Bank of America as administrative agent, for up to $725 million in debtor-in-possession (DIP) financing which, subject to court approval, is expected to support the company’s operations during the financial restructuring process.
Bill Tracy, president and CEO, said, “We are currently engaged in discussions with potential investors and our debtholders on a financial restructuring plan, and the actions we are taking are intended to give us additional time and financial flexibility to evaluate options for our business. Bon-Ton has seven well-loved brands and associates who have remained committed to delivering excellent service to our customers for decades. During this court-supervised process, we plan to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
Bon-Ton filed a number of customary motions with the Bankruptcy Court seeking authorization to support its operations during the financial restructuring process, including authority to pay wages and provide health and other employee benefits, and to pay vendors in the ordinary course for all goods and services provided on or after the Chapter 11 filing date. The company expects to receive bankruptcy court approval for these requests.
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