Loyalty Ventures Inc. filed for bankruptcy Friday, blaming its financial problems largely on its 2021 spinoff from its parent company, a move that it said left the new business with substantial debt and limited cash flow, WSJ Pro Bankruptcy reported. The Dallas-based loyalty-programs operator filed for chapter 11 in the U.S. Bankruptcy Court in Houston and said it plans to sell its customer-rewards programs including its Air Miles Reward Program, a loyalty program popular in Canada, and its Europe-based BrandLoyalty program for grocers and other retailers. Loyalty, which initiated a companion bankruptcy in Canada, listed nearly $1.6 billion in assets and nearly $2 billion in debt. The chapter 11 filing comes little more than a year after Loyalty was spun off from Bread Financial Holdings Inc., formerly known as Alliance Data Systems Corp. Revenue and earnings at Loyalty were in decline even before the spinoff and the company was saddled with substantial liabilities, it said in court filings. Loyalty owes more than $656 million on a credit facility it was required to take on as part of the 2021 spinoff, Chief Executive Charles Horn said in a sworn statement. Proceeds from the credit facility plus $100 million taken from Loyalty’s operating businesses were used to pay down Alliance Data debt, Mr. Horn said. Read more.
