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WWD: Barneys Chapter 11, How Much Risk Will Vendors Take?

WWD: Barneys Chapter 11, How Much Risk Will Vendors Take?

August 14, 2019 by Maylynn

August 14th, 2019 - Posted in In The News

The retailer lined up roughly $218 million in debtor-in-possession financing, but much of it may go toward paying off its secured debts.

By Sindhu Sundar on August 13, 2019

Last week in bankruptcy court, Barneys New York’s attorneys heralded a roughly $218 million financing arrangement that they said would better position the luxury retailer for a sale, and which they said showed enduring confidence in the brand. 

But vendors shipping to Barneys during the bankruptcy proceedings might be treading with caution, as its new debtor-in-financing agreement envisions paying off all its pre-petition secured debt, with some exceptions, according to court filings on Friday. Given the retailer’s considerable debt — including at least $190 million in secured obligations — as well as its ongoing lease and other expenses during the bankruptcy process, vendors may find themselves in a tenuous position, said bankruptcy attorneys…

“Paying down a substantial portion of the secured debt obligations, with the goal of taking out the secured creditors and replacing them with the new lenders, is pretty standard practice in this kind of environment,” said Brett Amron, a business and bankruptcy litigation partner at Bast Amron LLP, who is not involved in the Barneys proceedings.

Continue reading in WWD.

The retailer lined up roughly $218 million in debtor-in-possession financing, but much of it may go toward paying off its secured debts.

By Sindhu Sundar on August 13, 2019

Last week in bankruptcy court, Barneys New York’s attorneys heralded a roughly $218 million financing arrangement that they said would better position the luxury retailer for a sale, and which they said showed enduring confidence in the brand. 

But vendors shipping to Barneys during the bankruptcy proceedings might be treading with caution, as its new debtor-in-financing agreement envisions paying off all its pre-petition secured debt, with some exceptions, according to court filings on Friday. Given the retailer’s considerable debt — including at least $190 million in secured obligations — as well as its ongoing lease and other expenses during the bankruptcy process, vendors may find themselves in a tenuous position, said bankruptcy attorneys…

“Paying down a substantial portion of the secured debt obligations, with the goal of taking out the secured creditors and replacing them with the new lenders, is pretty standard practice in this kind of environment,” said Brett Amron, a business and bankruptcy litigation partner at Bast Amron LLP, who is not involved in the Barneys proceedings.

Continue reading in WWD.

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Maylynn Menoud  | Marketing Director
T: (305) 379-7904 | D: (305) 357-4794
mmenoud@bastamron.com

BAST AMRON is a boutique law firm focused on business insolvency and litigation. Our insolvency practice emphasizes workouts, restructurings, liquidations, bankruptcy, and bankruptcy avoidance. We represent debtors, creditors, committees, trustees, and other fiduciaries in bankruptcies, receiverships, and assignments for the benefit of creditors. Our litigation practice is primarily plaintiff oriented. We know how to investigate, formulate and prosecute claims arising from business disputes. By combining our business insolvency knowledge with our extensive courtroom experience, we successfully guide our clients through all aspects and types of commercial litigation in state and federal courts across the country. Whether the issue is litigation or insolvency or both, we view our clients’ needs through a holistic lens to formulate and implement dynamic solutions to their most important challenges.

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