PetSmart Inc. says it was in full compliance with the financial requirements under its debt agreements when it transferred shares of its online business Chewy.com out of reach of its lenders and secured bondholders, according to a letter sent to a district court judge, WSJ Pro Bankruptcy reported. The pet products retailer is a key figure in a lawsuit against the agent for its term loan lenders over transfers in June of 36 percent of the company’s shares in Chewy.com to entities that are out of the reach of the holders of PetSmart’s term loans. In June the company transferred a 20 percent stake in Chewy.com to its parent Argos Holdings Inc., an entity that is under direct control of private-equity owner BC Partners, and another 16.5 percent stake to a PetSmart subsidiary called Buddy Holdings Corp. PetSmart subsequently sued Citibank NA, the agent on its term loans, for refusing to bless the transactions.
