DIP Financing, Liquidator Team Approved for LNT
June 9, 2008-- Home Textiles Today,
Linens 'n Things reported that the U.S. Bankruptcy Court in Delaware has given final approval to $700 million in debtor-in-possession (DIP) financing from GE Capital Corp.
The financing was approved May 28, the company said on June 2.
The approval of the DIP facility ensures that LNT's business and stores will continue to operate without interruption, the company said, adding it will allow the retailer to "normalize" relations with vendors heading into the back-to-school season.
Linens 'n Things filed Chapter 11 on May 2. Interim approval of the DIP financing was granted on the same day.
As of the close of business on May 29, the company had excess availability of $140.7 million under the DIP facility. This amount reflects an increase of $44.1 million over the excess availability earlier projected by the company for the end of May, according to documents.
On May 30, the court approved SB Capital and Tiger Capital as the liquidation team for the 120 stores LNT will soon close; their bid included $122.8 million up front to LNT for that inventory. The going-out-of-business sales may net somewhat more. According to the 8-K filed by LNT with the SEC on June 5, "To the extent that the proceeds of the store closing sales exceed the sum of the guaranteed amount, expenses of the sale … and the agent's fee, then all remaining proceeds will be shared 50% to the debtors and 50% to the agent."
The SB/Tiger liquidators must complete their store closing sales by Aug. 31, the document states.
On an additional note, LNT announced that approximately 83% of the dollar amount of all product orders from domestic vendors for May or June delivery have been or are being shipped on terms.