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Crumbs Bake Shop Inc. notified employees yesterday that it would be closing all of its stores at the end of the business day, the Wall Street Journal reported today. "Regrettably Crumbs has been forced to cease operations and is immediately attending to the dislocation of its devoted employees while it evaluates its limited remaining options," the company said. Those options could include a bankruptcy filing, according to the company. Crumbs went public three years ago at the height of the gourmet-cupcake boom. Since then, its financial outlook has grown bleak amid several years of losses, a dwindling cash supply, and a food craze that is petering out. It currently has 48 stores in 10 states and the District of Columbia, according to its website. In March, Crumbs said it closed nine underperforming stores during the last three months of 2013, shut six at the start of 2014 and had more closures on the way.

After weeks of intense wrangling, one of American Apparel’s longtime lenders, Lion Capital, has demanded immediate repayment of a $10 million loan it made to the troubled retailer, after negotiations over new terms failed, the New York Times reported today. Although a potential new benefactor, the New York-based investment fund Standard General, has said that it was considering making the repayment on behalf of the company, it was unclear yesterday whether it would take that step or whether American Apparel would pay back the loan some other way. The move by Lion Capital is only the latest turn in a saga that has roiled American Apparel since the board ousted the company’s founder, Dov Charney, last month over concerns about his personal and professional conduct. The loan from Lion Capital, a British private equity firm that once owned Jimmy Choo, was always a precarious arrangement for the American Apparel. It came with a credit card-style 20 percent interest rate, as well as a provision that said if Charney were no longer chief executive, the loan could be called in. Crucially, the loan is also tied to another line of credit. If American Apparel defaults on its loan from Lion, it could cause a default on a $50 million loan from Capital One, should the bank follow Lion’s lead and demand repayment.

Fresh & Easy Neighborhood Market Inc., the former U.S. grocery chain, won court approval of its plan to exit bankruptcy by paying creditors in full, except for owner Tesco Plc., Bloomberg News reported yesterday. The company, now known as Old FENM Inc. after selling most of its assets to an affiliate of billionaire Ron Burkle’s Yucaipa Cos., obtained approval from Bankruptcy Judge Kevin J. Carey after resolving objections before yesterday’s bankruptcy court hearing. Tesco “voluntarily agreed to subordinate its claims to all other creditors” in exchange for releases from lawsuits and any value left over after all other claims are fully paid, Timothy W. Hoffmann, a lawyer for Fresh & Easy, said at the hearing.

Quiznos said yesterday that it has emerged from bankruptcy after restructuring its finances, the Associated Press reported yesterday. The toasted sandwich chain filed for chapter 11 protection in March and reduced its debt by more than $400 million. CEO Stuart Mathis said that it plans to increase sales by revitalizing the brand and reinforcing itself as a place for a "fresh, high-quality and great-tasting alternative to traditional fast food offerings." The Denver company owns and operates only seven of the nearly 2,100 Quiznos restaurants around the country. The rest are owned and operated by franchisees and weren't part of the bankruptcy proceedings. Quiznos provides franchise owners with training, store designs and marketing support.

Brookstone Holdings Corp. won a judge's approval yesterday to sell itself to a consortium of Chinese investors that plans to continue operating the majority of the specialty retailer's 240 stores after the company exits bankruptcy, the Wall Street Journal reported today. The sale to Sailing Innovation US Inc. would form the centerpiece of a bankruptcy exit plan, approved yesterday by Bankruptcy Judge Brendan Shannon. The plan seeks to pay off Brookstone's approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring. Sailing Innovation — a consortium made of investment firm Sailing Capital Overseas Investment Fund LP and conglomerate Sanpower Group — agreed to buy Brookstone at a June 2 auction with a bid of about $174 million.

When women’s clothing retailer Coldwater Creek filed for chapter 11 protection in April, the company went out of its way to tell a bankruptcy judge that it planned to continue honoring gift cards and other customer service programs for the purpose of “preserving goodwill and maximizing revenue during the liquidation process,” the Wall Street Journal reported on Saturday. One customer promotion, however, didn’t make the cut — tens of thousands of Groupon deals offering Coldwater Creek shoppers $50 worth of merchandise for $25. In a court filing made on June 18, Groupon — the Chicago-based purveyor of deals on everything from restaurant meals to sky diving adventures — says that Coldwater Creek customers still held $2.8 million in unredeemed vouchers when the retailer went into bankruptcy. Unlike other promotions, the Groupon certificates were no longer accepted after the company’s bankruptcy filing, an attorney for Coldwater Creek confirmed Friday. Since the stores began rejecting the deals, Groupon has issued about $1.29 million in refunds to Coldwater Creek customers, according to its recent filing, and “that amount will continue to increase.”

Brookstone Holdings Corp. will go before a bankruptcy judge this week to seek approval of its bankruptcy exit plan, the Wall Street Journal reported on Saturday. The centerpiece of the retailer’s plan is a $174 million bid to buy the company from Sailing Innovation US Inc. — a collaboration between Chinese investment firm Sailing Capital Overseas Investment Fund LP and Chinese conglomerate Sanpower Group, with a financing commitment from GE Capital. The consortium’s bid trumped a $146.3 million offer by an affiliate of Spencer Spirit Holdings Inc., the parent of the Spencer’s and Spirit Halloween retail chains, which had served as the lead bidder at a June 2 auction. Under the current plan, Brookstone’s unsecured creditors will receive at least $1.25 million, plus a chance to collect as much as $1.5 million more depending on how much money comes in from the sale. The plan also proposes to pay off the company’s approximately $51 million in bank loans with a loan provided by bondholders funding the restructuring.

American Apparel warned yesterday that the abrupt ouster of controversial CEO Dov Charney may pitch the company into bankruptcy by triggering defaults on two outstanding loans, the Los Angeles Times reported today. In an SEC filing, American Apparel said that the board's move to terminate Charney may trigger defaults under credit agreements with Lion/Hollywood and Capital One Business Credit Corp. A default "could cause us to become bankrupt or insolvent," the retailer told the Securities and Exchange Commission. Any acceleration on debt payments "would have a material effect on our liquidity, financial condition and results of operations." As of March 31, American Apparel owed Lion/Hollywood $9.9 million, a loan that matures in 2018, according to filings. The company also owed nearly $30,000 to Capital One in a revolving credit facility. The company is seeking a waiver from the lenders to prevent any default but warned that it has "no assurance" one will be granted on terms on the company can accept, if at all. American Apparel said the loan agreement with Lion/Hollywood specifies that if Charney ceased to be CEO, the lenders can declare all outstanding obligations to be immediately due. American Apparel says that misconduct led to founder Dov Charney's ouster.

Mattress Source, an independent chain of more than a dozen stores in the Midwest, has filed for bankruptcy and will shutter some unprofitable locations, the St. Louis Post-Dispatch reported today. St. Louis-based Jamat LLC, which does business as the Mattress Source, filed for chapter 11 protection on Friday. It has 13 local stores in Missouri and Illinois. In its filing, the chain said that both its assets and estimated liabilities range between $1 million and $10 million.

Online retailer and distributor Dr. Bott, a fixture in the Apple-accessory market since the late 1990s, has filed for chapter 11 bankruptcy in its home state of Oregon, Macworld.com reported yesterday. The original petition was filed on May 1, with notices sent to creditors later in the month. Founded in 1999, Dr. Bott was originally a distributor providing accessories to independent Macintosh resellers. As a distributor, Dr. Bott was known for providing smaller accessory vendors the means of distributing their products much more widely than they could on their own. Though the company’s website currently advertises a Spring Cleaning Sale, sources told Macworld that the sale is mainly a way for Dr. Bott to sell off the company’s remaining inventory.