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Destination Maternity files under Bankruptcy Code

24
Oct '19
Pic: Wikipedia
Pic: Wikipedia
Destination Maternity Corporation, US-based retailer for maternity apparel and accessories, along with its certain subsidiaries, has filed voluntary petitions to restructure under chapter 11 of the US Bankruptcy Code in the district of Delaware. The company has obtained consent to use cash collateral from all of its prepetition secured lenders.

Destination filed to facilitate and continue a marketing process begun in early September that has already yielded indications of interest from several credible bidders. "The company believes that the access to liquidity will be sufficient to pay suppliers and other business partners and vendors for authorised goods and services provided post-filing and during the chapter 11 process," it said in a press release.

As per the process, binding bids need to be submitted by December 5, 2019, followed by an auction to on December 9, 2019, and entry of an order by the Bankruptcy Court approving the sale by December 12, 2019.

"The company also intends to use the court-supervised process to optimise the company’s operations, including by right-sizing the company’s brick-and-mortar store footprint. Destination Maternity is expected to continue to operate and serve its customers, vendors, and partners, and pay its employees in the ordinary course," the release said.

“This decision is a difficult, but necessary one,” said Lisa Gavales, chair of the Office of the CEO of the company. “In a challenging retail environment, we have had to make some very tough choices, but we are confident that the steps taken today provide an opportunity to continue a marketing process that provides the most efficient means of maximising value to our stakeholders. Throughout this process we will be focused on developing the promising interest already shown by potential bidders, and maintaining operational momentum toward a stronger business.”

Throughout the chapter 11 process, Destination Maternity, A Pea in the Pod, and Motherhood stores will continue to deliver the high-quality products and services to which its customers are accustomed to both in stores and online. The company is also filing customary first day motions that, once approved by the Bankruptcy Court, will allow it to smoothly transition its business into chapter 11.

Fibre2Fashion News Desk (RKS)


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