Pacific Sunwear of California Inc. won court approval to exit bankruptcy after cutting debt, closing some stores and pressuring landlords to reduce rent at the malls where the teen-clothing chain does business, Bloomberg News reported yesterday. Under the reorganization plan approved yesterday by Bankruptcy Judge Laurie Selber Silverstein, PacSun will give all its stock to affiliates of private equity firm Golden Gate Capital, its senior lender. In exchange, Golden Gate will reduce the amount it’s owed by PacSun to about $30 million initially from $88 million, Gary Schoenfeld, the retailer’s chief executive officer, said in an interview. Golden Gate has also agreed to invest $20 million in the company, most likely in form of new debt, he said. Read more.
Does bankruptcy still work for retail? Listen to the perspectives of bankruptcy judges and top practitioners at ABI’s Views from the Bench in Washington, D.C. on October 7. Register here.
