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Published
Jan 23, 2011
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Orchard Brands bankrupt; to slash debt by $420 mln

By
Reuters
Published
Jan 23, 2011

Jan 20 (Reuters) - U.S. apparel and home products marketer Orchard Brands filed for bankruptcy in a Delaware court late Wednesday under a pre-negotiated deal with its lenders that will cut the company's debt by more than $420 million.


Appleseed's online catalogue - (one of Orchard's Brands)

In a statement, the company said it had sought bankruptcy court approval for a $140 million debtor-in-possession loan to continue operations while in bankruptcy.

More than 80 percent of Orchard Brands' first lien secured lenders and all of its second lien secured lenders have agreed to support the restructuring.

The second lien secured lenders have also agreed to invest $40 million of new capital in the company.

Orchard Brands said it has already secured a commitment from its current lenders to provide up to $120 million in exit financing.

Orchard Brands, which employs about 4,260 people, listed estimated assets of $100-$500 million in its Chapter 11 petition.

As of December 2010, the company had about $725.1 million in secured and unsecured debt and a total interest expense of about $52 million, Orchard Brands Chief Executive Neale Attenborough said in a court filing.

Orchard Brands, a portfolio company of Golden Gate Capital, said its vendors and employees would continue to get paid during the Chapter 11 process.

The company, which markets apparel and home products to women and men over the age of 55 under brands such as Appleseed's, has been hurt by declining sales.

CEO Attenborough said the substantial debt burden had hindered its ability to effectively compete in the market.

The case is in re: Appleseed's Intermediate Holdings LLC, et al, Case No. 11-10160 (KG), U.S. Bankruptcy Court, District of Delaware. (Reporting by Sakthi Prasad and Santosh Nadgir in Bangalore; Editing by Jane Merriman, Anne Pallivathuckal)

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