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Deb Shops Files For Chapter 11 Bankruptcy

DebWomen’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.” 

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