Hayward, Calif.—Mervyns has received court approval for its bankruptcy finance plan almost exactly one month after filing for Chapter 11 bankruptcy protection, the company reported on Wednesday.
According to a media release from the company, the U.S. Bankruptcy Court for the District of Delaware granted final approval of the company's $465 million debtor-in-possession financing facility.
Under the plan, which met with the support of the creditors' committee, the financing and cash generated from operations of the California-based department store chain will be used to continue to pay vendors and employees and provide operational stability as Mervyns proceeds with its restructuring, with an eye on emerging from bankruptcy.
"The court's approval of our DIP financing is a significant step in our reorganization process and one we are pleased to have accomplished," Mervyns Chief Executive Officer John Goodman said in the release. "Our DIP financing provides Mervyns with the liquidity and stability it needs to continue serving our customers and meeting our obligations to vendors. With this final DIP financing in place and our financial position now strengthened, we are able to maintain our operations while continuing our discussions with creditors as we focus on emerging from bankruptcy."
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