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Court OKs Eddie Bauer DIP loan facility
09
Jul '09
Eddie Bauer Holdings Inc announced that it has received approval from the U.S. Bankruptcy Court in Delaware of a number of key motions further facilitating the Company's ability to continue normal operations as it moves forward with its sale process.

Among other things, the Company received final authorization to utilize its $100 million Debtor-in-Possession (DIP) loan facility from its existing revolving credit lenders, Bank of America N.A., GE Capital Corporation and CIT Group/Business Credit Inc, and to use its cash collateral to meet certain ongoing obligations to employees, customers, suppliers and other key constituents.

The Company also received final Court approval to continue to pay its employees in the usual manner, including prepetition wages and salaries, and to pay independent contractor fees and expenses.

The Court had previously granted, in a hearing on June 18, 2009, interim approval for the Company to access $90 million of the $100 million DIP facility, along with interim or final approval of other relief requested by the Company in its "First Day" motions.

"With the Court's rulings, we continue on track to conduct business as usual as we proceed with our sale process," said Neil Fiske, President and Chief Executive Officer. "The new DIP financing provides liquidity to meet our ongoing obligations, and we appreciate the strong support we have seen from our employees, customers and suppliers. We remain confident that we are on the right path to put Eddie Bauer in a stronger financial position for the future."

On June 17, 2009, the Company announced that it had initiated voluntary proceedings under Chapter 11 in the United States and the CCAA in Canada in order to pursue a sale of the business. The case is pending before the Honorable Mary F. Walrath in the U.S. Bankruptcy Court for the District of Delaware.

The Company has entered into an asset purchase or "stalking horse" agreement with an affiliate of CCMP Capital Advisors, LLC ("CCMP Capital") to buy the Company's assets, subject to an auction and Bankruptcy Court approval. The Court has set July 16, 2009 as the auction date, with a hearing to be held on July 22, 2009 to approve a sale.

Eddie Bauer Holdings Inc


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