Rue21 Inc. and its lenders are in negotiations surrounding the teen apparel retailer’s likely bankruptcy filing, the Wall Street Journal reported yesterday. The retailer, which has been in search of a junior bankruptcy loan since mid-April, is in talks with its term-loan lenders to fund this debtor-in-possession facility. While the retailer has been trying to raise a junior loan in the ballpark of $50 million, discussions about the size are still fluid. Talks regarding rue21’s restructuring pact and bankruptcy financing come as the retailer has obtained a one-week extension on a forbearance agreement after missing an interest payment in early April. With the extension, rue21 is expected to file for bankruptcy protection in the Pittsburgh bankruptcy court as early as next week.
