Although home goods retailer Linens 'n Things is folding up the last of its towels and bedding supplies, and emptying sales racks at 120 of its underperforming stores, an interim $700 million loan will allow the company to keep operating to pay off older debts.
Bloomberg reports that Linens 'n Things and parent company Linens Holding Company filed for Chapter 11 bankruptcy protection on Friday, listing debt of $1.42 billion and assets of $1.74 billion. Should the company, taken private by Apollo Management LP in 2006, win final approval later this month, the money will be used mainly to pay off a group of ten lenders owed at least $430 million, including General Electric (GE), hedge fund operator Silver Point Finance LLC, and JPMorgan (JPM).
In June, the company hopes to start liquidating the 120 underperforming stores ahead of shutting them down. The company currently employs about 15,900 workers in 551 U.S. locations.
Given the weakened economy and broad consumer cutbacks in spending, is anyone surprised?
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