RICH’S FILES FOR CH. 11
NEW YORK — Rich’s Department Stores, the 26-unit discounter beset by losses and slumping sales, filed a Chapter 11 petition Thursday seeking to reorganize.
It is likely to close several underperforming stores, according to market reports.
The Salem, Mass.-based chain, which has been ailing for several quarters, signed a $25 million debtor-in-possession financing agreement with Gordon Bros. Financial Corp., Boston. The deal is subject to bankruptcy court approval.
Most of the DIP financing cash, or $20 million, will go immediately to pay back Congress Financial, Rich’s previous lender, according to Rick L. Levine, counsel to Rich’s. He said the remainder will be used to fund operations.
