NEW YORK — Bedford Fair Industries, a women’s apparel catalog house that filed a Chapter 11 petition on August 29, has received court approval for $10 million in debtor-in-possession financing.
The Greenwich, Conn.-based firm has the option to increase the line with Foothill Capital to $15 million. The filing in White Plains, N.Y., listed liabilities of $34.3 million, of which $33 million was unsecured. Assets were $28.8 million.
Alan Glazer, Bedford’s chairman and chief executive officer, said in an affidavit that the filing was caused by “a series of unfounded rumors” circulated among vendors that the company had filed or was close to filing for bankruptcy or was being sold.
As a result of the rumors, a big portion of the firm’s credit was cut and merchandise shipments were reduced to a trickle, leaving insufficient cash to meet the vendors’ demand for prepayment, letters of credit and the payment of current bills, Glazer said.
He said the catalog, which sells under the Bedford Fair Lifestyles and Willow Ridge names, is “a viable business” with more than 500,000 active customers and sales exceeding $100 million in the last year. The firm has about 500 employees.