Children's Place completes transaction between Hoop & Disney
May 01, 2008 - United States Of America
The Children's Place Retail Stores Inc announced that its subsidiary Hoop Holdings, LLC (Hoop) has successfully completed the transition of the Disney Store North America (DSNA) business and related assets to affiliates of The Walt Disney Company (Disney).
In connection with the transaction, the Company has agreed to provide transitional support services to the Disney affiliates for a period of up to six months. At this time, the Company estimates that it will incur cash exit costs of approximately $50 million, at the low end of its previously stated range of $50 million to $100 million.
The majority of these cash costs have already been incurred in the first quarter of fiscal 2008. As part of the transaction, the Company has received a release from Disney and has settled potential claims with Hoop.
Upon closing, Hoop will proceed with the administering of the bankruptcy and its claims. Hoop anticipates filing a plan of reorganization and disclosure statements in order to effect a distribution to its administrative and unsecured creditors by the end of 2008.
Chuck Crovitz, Interim Chief Executive Officer of The Children's Place Retail Stores, Inc., stated, "We are pleased to have completed this transaction successfully, expeditiously and at the low end of our previously stated exit cost range. This event marks a major milestone for both The Children's Place and our Hoop subsidiaries.
For The Children's Place, we can once againfocus exclusively on building our core namesake brand and driving the business forward. For Hoop, the transfer of the DSNA business back to Disney maximizes the return to creditors, enables a substantial portion of the chain to continue operating and is in the best interest of Hoop's suppliers, landlords, creditors and others."