Orchard Brands to restructure, files for Chapter 11

blair.pngGolden Gate Capital-owned Orchard Brands, which targets men and women in the 55-plus age demographic, on Wednesday said it reached an agreement with the majority of its lenders to restructure the firm in a move that also includes a voluntary Chapter 11 filing in Delaware.

The bankruptcy filing was under the name Appleseed’s Intermediate Holdings, reported Women’s Wear Daily.

Golden Gate in October hired Moelis & Co. to find a buyer for the business, which does an estimated annual volume of nearly $1bn, according to financial sources. Market and financial sources in November said there were few takers, and by December there was speculation that a bankruptcy filing was on the horizon.

According to the company, the new agreement with its lenders will eliminate $420m of debt and provide $40m in new investment into the business. It is seeking bankruptcy court approval of a $140m debtor-in-possession financing facility.

“This should finally put an end to the long, drawn-out vendor uncertainty. If everything goes as planned they should emerge a much stronger company,” said Bob Carbonell, Executive Vice President and Chief Credit Officer for Bernard Sands.

Beverly, Mass.-based Orchard Brands’ umbrella includes 17 catalogue businesses, and employs 3,000 full-time and 1,260 part-time staffers .

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