By  on December 15, 2010

Loehmann’s thinks its second tour of bankruptcy can be wrapped up in a little over 90 days.

Loehmann’s Capital Corp. said Wednesday that it would exit Chapter 11 on or before Feb. 18, after it reached an agreement with unsecured creditors.

Through a rights offering to the firm’s senior secured Class A note holders, the retailer will receive a $25 million capital infusion upon emerging from Chapter 11. Under the terms of the agreement, general unsecured creditors will obtain a pro rata distribution consisting of $2 million in cash.

According to the company, this proposed restructuring plan “should pave the way for an expedited Chapter 11 process.”

Loehmann’s, a New York-based off-price chain founded 89 years ago, filed a voluntary prepackaged Chapter 11 petition in Manhattan bankruptcy court on Nov. 15. Recently, it reached an agreement with Whippoorwill Associates Inc., which owns 70 percent of the senior notes, and equity sponsor Istithmar World that would substantially reduce the retailer’s debt and recapitalize its balance sheet, conforming strongly to the outline offered at the time of its bankruptcy filing.

Loehmann’s also secured court approval for $33 million revolving credit with Crystal Financial LLC for post-petition financing and an additional $7 million junior facility by Whippoorwill, which will be made immediately available to the company.

The retailer added that the $7 million would allow it to begin buying spring inventory, reserve inventory and products manufactured specifically for the brand.

“With these capital commitments, Loehmann’s will have sufficient liquidity and the financial flexibility to fund daily operations without interruption,” the company said.

The store also filed for bankruptcy protection in May 1999, exited bankruptcy in October 2000 and was acquired by Istithmar in July 2006.

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