COURT OKS DIP BALANCE FOR WARNACO
Byline: Vicki M. Young
NEW YORK — The Warnaco Group Inc. on Monday received final approval from a Manhattan bankruptcy court on the $225 million balance of its $600 million debtor-in-possession financing facility.
The ailing firm filed a voluntary Chapter 11 petition to restructure on June 11. At the time, Warnaco secured a $600 million DIP facility from a consortium of banks led by Citibank, J.P. Morgan Chase and The Bank of Nova Scotia.
On the day of its Chapter 11 filing, as part of first-day orders, Warnaco received interim court approval of $375 million of the DIP facility.
Tony Alvarez, chief restructuring officer and founding partner of Alvarez & Marsal, Inc., a turnaround management firm, told Bankruptcy Judge Richard Bohanon, “The situation on the ground is fairly stable. The vendors are shipping.” He said that the company was using the next 60 to 90 days to review operations and determine where further cost reductions and efficiencies could be effected. The manufacturer is expected to make some decisions about which additional assets will be sold once that review is completed. Alvarez also told the court that Warnaco’s contracts with its licensors are in place. “All of our obligations are being honored,” he said, adding that there have been “no disruptions in royalty payments.”