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David’s Bridal Files Chapter 11; Seeks Approval for $60MM DIP Financing from BofA

November 20, 2018, 07:50 AM
Filed Under: Retail

David's Bridal announced that it has taken the expected next step to implement its previously announced restructuring support agreement (RSA), filing for Chapter 11 in United States Bankruptcy Court in the District of Delaware. The court-supervised process is expected to be completed by early January.

According to the company, implementing the RSA, which is supported by the vast majority of the Company's term loan lenders and substantially all of its senior noteholders and equity holders, will reduce the retailers debt by more than $400 million and provide significant financial flexibility to support long-term growth prospects. 

David's Bridal has sufficient liquidity to meet its business obligations and will continue to operate its business as usual throughout the court-supervised restructuring process, including meeting and exceeding customer expectations and needs. Customers can continue to shop across the more than 300 David's Bridal stores and online without disruption. Orders will arrive on time and bridal appointments will not be impacted.

"For more than 60 years, David's has delivered beautiful, high-quality dresses and accessories for our customers' most special occasions, and the actions we are taking will enable us to build on that tradition," said Scott Key, Chief Executive Officer of David's Bridal. "Our team is laser focused on providing brides and their families with the five-star service and experience they deserve and have come to expect from us."

Key added, "Today's announcement is just the next step in our efforts to proactively secure David's Bridal for a long, successful future. We are implementing our consensual restructuring plan from a position of strength and, with the support of our lenders, noteholders and equity holders, the plan will allow us to reduce our debt significantly while continuing to run our business as usual. We will be able to move through the Court process very quickly, and in the end, we will be able to allocate even more of our resources towards making strategic investments in digital technologies and talent that will drive long-term growth and operational excellence at David's Bridal."

In conjunction with the pre-packaged Chapter 11 process, the Company has filed a number of customary motions seeking authorization to support its operations during the court-supervised process, including authority to continue payment of employee wages and benefits and honor customer payments and orders for dresses and alterations.

As part of the court-supervised process, David's Bridal has obtained commitments for $60 million in new debtor-in-possession (DIP) financing from its current term loan lenders and a recommitment of its existing $125 million ABL revolving credit facility to support the Company's continued operations during the restructuring. The long-standing vendor and manufacturing partner relationships essential to David's success are expected to be unimpaired during restructuring. The company filed a motion on Nov. 19 seeking court approval for the DIP financing. 


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