U.S. Bankruptcy Judge
The southeastern retailer, which filed for court protection in Houston, entered bankruptcy after developing a restructuring plan that was pre-approved by a majority of its debt holders. It listed assets and liabilities of between $1 billion and $10 billion each in its
Belk’s plan cuts its debt and provides $225 million of new capital from Sycamore and other lenders. Bloomberg on Jan. 25 reported Belk was preparing the Chapter 11 filing.
The new capital comprises a loan backstopped by lenders including
“Belk will have ample time to grow into its capital structure going forward,” Fagen said, adding that the retailer will be left with about $1.46 billion of debt when it exits bankruptcy.
Fagen said that at the time of the bankruptcy filing, Belk was “running on fumes,” with $7 million of available cash.
Department store chains have been suffering from a years-long decline as shoppers shifted to more specialized or novel merchants. Last year,
William Henry Belk opened his first store, called The New York Racket, in 1888. The mid-priced chain bought up other department store chains along the way growing to almost 300 locations in 16 states, mostly in the South. Sycamore, a private equity firm, bought Belk in 2015.
The case is Belk Inc.,
(Adds approval of plan in first paragraph, record-setting speed in second.)
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Dawn McCarty, Nicole Bullock
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