Orchard Supply Hardware Stores announced that the bankruptcy court has given final approval for the company to access $177 million in debtor in-possession (DIP) financing provided by Wells Fargo, the company’s existing ABL lender, and its term loan lenders.

Orchard said this financing, in addition to its ongoing cash flow, will ensure the company is able to continue meeting its financial obligations throughout the Chapter 11 case. The Court previously had given interim approval for the DIP financing agreement on June 19, 2013.

As announced on June 17, 2013, Orchard has reached an agreement through which Lowe’s will acquire the majority of its assets for $205 million in cash, plus the assumption of payables owed to nearly all of Orchard’s supplier partners. Under the terms of this agreement, Orchard will operate as a separate, standalone business at the completion of the sale process, retaining its brand, management team and associates.

To facilitate the sale and restructure its balance sheet, Orchard filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. The agreement with Lowe’s comprises the initial stalking horse bid in the Court-supervised auction process under Section 363 of the Bankruptcy Code.

On July 8, 2013, the Court approved bidding procedures establishing August 9, 2013, as the deadline by which any competing offers for the Company’s assets must be received. If the company receives any qualifying bids in advance of this deadline, an auction will be held on August 14, 2013. The final sale hearing has been scheduled for August 20, 2013.

Orchard is advised in this financial restructuring by Moelis & Company, FTI Consulting, and DLA Piper.

Previously on abfjournal: WSJ: Orchard CFO Says Lenders Helped Boost Lowe’s Bid, July 16, 2013