Coldwater Creek Wins Approval of Bankruptcy LoanMichael Bathon
Coldwater Creek Inc. won court approval to borrow $42 million to finance operations while the women’s clothing retailer prepares for going-out-of-business sales at its more than 370 stores.
The loan from current lender Wells Fargo & Co. will allow the company to maximize returns for creditors, Coldwater said in court papers. Coldwater, founded as a catalog business 30 years ago, said last week it intends to start liquidating inventory just before the May 11 Mother’s Day holiday.
U.S. Bankruptcy Judge Brendan Shannon at a hearing today in Wilmington, Delaware, granted the company interim approval to borrow as much as $42 million of a $75 million financing package. The loan is “necessary to avoid irreparable harm,” to the company, the judge said.
Coldwater will return to court on April 25 to seek permission to borrow the rest of the money and approval of an auction process to test an offer to run the store-closing sales from liquidators Hilco Merchant Resources LLC and Gordon Brothers Retail Partners LLC.
Coldwater wants an April 28 deadline for other bids to oversee the sales and an auction on May 1 if it receives any, followed by a May 6 hearing to seek approval of the deal with the best terms. The store-closing sales would start on May 8 if the proposed schedule is approved.
Coldwater on April 11 joined women’s clothing chains Dots LLC and Ashley Stewart Holdings Inc. and discount fashion retailer Loehmann’s Holdings Inc. in bankruptcy after sales declined and losses mounted in the wake of the U.S. recession.
The Sandpoint, Idaho-based company listed assets of $278.5 million and debt of $361.3 million in Chapter 11 papers.
The case is In re Coldwater Creek Inc., 14-bk-10867, U.S. Bankruptcy Court, District of Delaware (Wilmington).