Spiegel files Ch. 11, execs resign
Home & Textiles Today Staff -- Home Textiles Today, March 24, 2003
After repeated warnings, The Spiegel Group last week filed Chapter 11 and secured a $400 million senior secured debtor-in-possession financing facility to supplement its existing cash flow during reorganization.
Banc of America Securities LLC arranged the financing facility, which is from Bank of America, N.A., Fleet Retail Finance, and the CIT Group/ Business Credit. The company expects to access $150 million of this facility upon bankruptcy court approval of an interim financing order, while the full facility is subject to final bankruptcy court approval at a later date and satisfaction of certain other conditions.
The company believes that the new financing, along with its current cash reserves and cash flow from operations, will be sufficient to fund its business during this process.
This comes less than a week after the company announced that it private label credit card could no longer be accepted at any of its businesses — Eddie Bauer, Spiegel catalog or Newport News.
At the beginning of the month, William Kosturos was appointed interim ceo and chief restructuring officer, after Martin Zaepfel retired as vice chairman, president, and ceo.
Additionally, the company appointed a new president and ceo of the Spiegel catalog and Newport News. Geralynn Madonna, previously president and coo of Newport News, is a 21-year company veteran. She replaces Melissa Payner, former president and ceo of Spiegel catalog, and George Ittner, former chairman and ceo of Newport News, both of whom resigned, though Ittner agreed to provide consulting services to the company.
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