The DIP facility provides Bon-Ton with up to $725 million in financing from existing asset-based lenders. It also received the court’s nod to continue payments considered in the ordinary course of business, such as wages to employees and to pay vendors for goods and services after the Chapter 11 filing date.
Bill Tracy, president and chief executive officer, said, “The court’s approvals of our First-Day motions are an important step forward in our financial restructuring process that will allow the company to continue operating in the normal course and executing on our key initiatives to drive improved performance.”
Tracy added the company will use the “additional time and financial flexibility of this court-supervised process to engage with potential investors and our debt holders on a financial restructuring plan as well as evaluate options for our business.”
Bon-Ton has been in discussions with the debt holders and its lending group for several weeks. The company essentially needs to find an investor who would take over majority control of the company before the debt holders would consent to continue their investment in the retailer. In case Bon-Ton can’t get an approved restructuring plan in place, it has also solicited and received two bids from liquidators in the event it needs to change course and pursue a liquidation of the company.