LNT looking for alternative to Chapter 11
April 17, 2008-- Home Textiles Today,
Clifton, N.J. – Linens Holding Company, the corporate entity that is Linens ’n Things, has retained investment banking firm Financo as a special advisor assisting the company as it frantically works to stave off a bankruptcy filing.
“What they basically want to do is avoid bankruptcy and come out of this as a strong, viable company,” said Gilbert Harrison, chairman of Financo.
“Bob DiNicola [LNT’s chairman and ceo] laid out a plan for fixing this company because it was in such horrendous shape when he took it over. What’s happened is not unusual. Bob was in the process of totally fixing the company when the housing crisis and the retail climate totally changed,” Harrison told HTT.
Harrison mentioned the possibility of finding a strategic partner to bring cash into the business. He said he believes Linens ’n Things should hold on to the Canadian stores and most of its U.S. store base, closing only the stores that are clearly not performing. The New York Post reported this morning that LNT has already begun to shop its 40 Canadian units.
“We are committed to exploring all reasonable avenues in our effort to strengthen the company and to adopt a financial solution that recognizes the inherent value of the Linens ’n Things’ business. Accordingly, we are our expanding our highly capable financial advisory team with the addition of Financo,” DiNicola said in a written statement today.
LNT earlier retained crisis management firm Conway, Del Genio, Gries & Co. as a financial advisor.
A week ago, LNT had been expected to file bankruptcy at any time as wary vendors ceased shipments. Two days ago, the company announced it had postponed until May 15 a $16.1 million interest payment due April 15 to its debt holders. LNT said it had obtained agreement from its lenders to take no “rights and remedies” action until May 13, the company stated in an 8-K filed with the SEC.
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