Women’s clothing retailer Deb Shops has filed for bankruptcy protection in a Delaware court.
The filing, which was submitted on November 30, is part of a financial restructuring that involves selling the company to a group of senior lenders.
Abelco Finance made the initial bid on the company assets. Lee Equity also will receive a stake in the company going forward. Both companies will pay $77 million in cash and take over Deb Shops’ $21.7 million debt and other liabilities, according to court papers. As of April 30, 2014, Deb Shops had total assets of $124.4 million and liabilities of $270.1 million.
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The existing management team will continue to run the Deb Shops business, and its 318 stores across the U.S. will remain open. “This is strictly a financial restructuring of Deb Shops’ business,” said CEO Mark Hoffman, “and we foresee no impact on our operations as we proceed through this process.”
