BRADLEES GETS COURT OK TO BORROW $100 MILLION

Byline: Jeff Siegel

NEW YORK--Bradlees Inc., which filed for Chapter 11 on Friday, won bankruptcy court approval Monday to borrow up to $100 million from its post-petition lender, Chemical Bank.
"[Bradlees] is in a triage stage, where there is a substantial need for this facility," said Bankruptcy Judge Burton R. Lifland in approving the deal.
Stuart Hirshfield, of Dewey Ballantine, counsel to Bradlees, had told Lifland that the deal would restore vendors' confidence in the discounter while allowing the firm to receive a steady flow of merchandise and pay operating expenses.
Prior to the filing, Hirshfield noted, Bradlees had experienced "a virtual stop in the delivery of merchandise" from vendors who did not ship for fear that they could lose even more money if Bradlees filed for bankruptcy protection later on.
Included in the $100 million interim facility is $50 million for letters of credit and another $50 million for purchases and payroll. Hirshfield said he did not believe Bradlees would draw on the entire $100 million facility, but noted that it was important to have as security.
Chemical Bank is charging Bradlees the London Interbank Offering Rate (LIBOR), plus 1 1/4 percent over the two-year agreement.
At the hearing, some of Bradlees creditors filed partial objections to the interim facility, asking Judge Lifland to slice the interim facility to about $35 million.
Jack Butler, of Skadden, Arps, Slate, Meagher & Flom, attorneys for a group of Bradlees' pre-petition lending banks, led by Bankers Trust, with $156 million in secured claims, said there was "no showing that [Bradlees] needs $100 million." Judge Lifland disagreed, noting that $100 million is an "appropriate amount."
In court papers, Bradlees said that in the 30 days following its Chapter 11 filing, estimated sales of $97.8 million and expenses of $129.9 million would create a loss over the period of about $32.1 million.
Separately, the discounter reported that Robert W. Benenati has been appointed senior vice president of distribution, overseeing transportation, traffic, vendor compliance and the retailer's two regional distribution centers in Braintree, Mass., and Edison, N.J. Benenati replaces Daniel E.P. Donegan, who is retiring. --Fairchild News Service

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