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Mervyns Gets Funds To Aid Bankruptcy Restructuring

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Jul 31, 2008 1:21 pm US/Pacific

Mervyns Gets Funds To Aid Bankruptcy Restructuring

HAYWARD (AP) ― Mervyns LLC, the mid-tier department store chain that filed for Chapter 11 bankruptcy protection on Tuesday, received approval from the U.S. Bankruptcy Court for $465 million in interim financing provided by Wachovia Capital Finance Corp.

The Hayward, Calif.-based department store chain, which operates about 175 stores primarily in California, on Thursday said the financing will be used to continue operations and to pay vendors as it restructures under Chapter 11. The final hearing on the debtor-in-possession financing is set for Aug. 26.

Privately held Mervyns also said it received court approval, among other things, to pay pre-petition employee wages, health benefits and other employee wages, health benefits and other employee obligations during its restructuring.

In addition, Mervyns is authorized to pay post-petition expenses and to continue to honor all of its current customer policies regarding merchandise returns and all of its outstanding gift cards and loyalty programs without seeking further court approval.

Mervyns, along with some affiliates, filed for Chapter 11 protection from its creditors in U.S. bankruptcy court for the District of Delaware. According to court documents, Mervyns listed liabilities and assets of $500 million to a $1 billion each, with Levi Strauss & Co. as its largest unsecured creditor.

(© 2009 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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