CREDITORS GROUP SET FOR FILENE’S BASEMENT
Byline: Vicki M. Young
NEW YORK — A nine-member unsecured creditors committee was appointed on Monday in the Filene’s Basement bankruptcy case.
The members are: JDA Software, Canadian retailer Holt Renfrew, Polo Ralph Lauren, Warnaco Group, Liz Claiborne, Jones Apparel Group, Pro Media Inc., Escada and The CIT Group.
Kronish Lieb Weiner & Hellman was selected as counsel to the committee, according to Jay R. Indyke, bankruptcy partner at the firm.
Meanwhile, credit lines are opening up again for the bankrupt retailer as factors and a credit reporting service are telling clients it’s OK to resume shipping.
As reported, Filene’s Basement filed for Chapter 11 bankruptcy court protection in Boston on Aug. 23. On the following day, the retailer received bankruptcy court approval of part of its $135 million debtor-in-possession financing facility with GE Capital Corp. and Paragon Capital, according to the retailer. A final hearing on the DIP package is set for Sept. 9.
Having a DIP package in place puts the retailer on firmer financial ground because vendors are likely to ship merchandise when they know they’ll get paid.
Bob Carbonell, director of credit for Bernard Sands, a credit reporting division of Charlotte, N.C.-based Credit Business Services Inc., told WWD, “The financial arrangements are sufficient for us to begin okaying orders.” Bernard Sands’ clients include manufacturers and wholesalers.
Phil Pergolizzi, credit manager at Capital Factors, said Thursday, “We are recommending to our clients to resume shipping.” He added that the retailer should have adequate inventory for the back-to-school selling season.
Financial sources noted that Sam Gerson, the retailer’s chairman and chief executive officer, was meeting with factors last week, lining up their support. Many said credit terms were no more than 15 days out, meaning Filene’s Basement would have to pay their vendor invoices within 15 days.
At least one factor is giving the retailer a little more breathing room. John Daly, executive vice president and senior credit officer at The CIT Group, said, “We’ve approved some orders, and we’re going out as far as 30 days.”
Gary Wassner, president of Hilldun Corp., another factor, said, “We haven’t been asked yet by any of our clients to OK orders, but we probably would approve some if asked.” He added, “At the moment, the marketplace is still cautious. No one is going to out on the limb.”