Belk receives Chapter 11 approval
Regional department store retailer Belk received approval for its Chapter 11 bankruptcy plan on Wednesday.
The North Carolina-based retailer received approval during a hearing in Houston providing the company with new capital and a revised debt load. The move will give the company room to grow as it continues to navigate the effects of the Covid-19 pandemic.
As part of the plan, owner Sycamore Partners transferred a large stake of the company to its lenders while maintaining control, while the company’s debt load was cut by about $450 million.
According to The Charlotte Observer, Sycamore got almost all of Belk’s creditors to approve the terms of the deal in advance allowing Belk to get in and out of bankruptcy within 24 hours.
The move is known as a pre-packaged bankruptcy.
“This is a rare chapter 11, your honor, where everyone wins,” said Steven Serajeddini, a lawyer for Belk, to Bankruptcy Judge Marvin Isgur at a Wednesday morning hearing.
“Nobody wanted to see a liquidation here.”
Belk is one of many retailers who furloughed workers and cut senior staff pay in March as stores were forced to temporarily close due to the Covid-19 pandemic.
The retailer also did a number of layoffs last year including the elimination of 80 corporate jobs at its headquarters in Charlotte, in February, followed by another cut in July.
The retailer currently operates nearly 291 stores in 16 southeastern states.
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