Hayward, Calif.—West Coast department store chain Mervyns LLC received court approval to continue to conduct business as usual despite its Chapter 11 bankruptcy protection filing.
On Thursday, the chain announced that the U.S. Bankruptcy Court for the District of Delaware granted interim approval of "first day" motions in the Mervyns Chapter 11 case.
The approval allows the company to move forward with its $465 million debtor-in-possession financing (DIP) plan, according to a release on Business Wire.
Under the plan, Mervyns will use the DIP as well as cash generated from operations to continue to pay employee wages and benefits and honor customer gift cards and returns.
In addition, the financing also allows the department store chain to pay all post-petition expenses and vendor obligations.
A final DIP hearing is scheduled for Aug. 26.
"With the Bankruptcy Court's prompt approval of our DIP financing and first day motions, we are moving forward with our reorganization under Chapter 11 while maintaining normal operations in our stores," Mervyns Chief Executive Officer John Goodman said in a media release issued on Thursday. "We are pleased that we can continue to serve our customers and purchase goods and services from our vendors as we seek to implement strategies to restructure our operations, strengthen our balance sheet and position Mervyns to compete more effectively."
Mervyns filed for Chapter 11 bankruptcy protection on July 29.
The Hayward, Calif.-based chain operates 176 locations in seven states, according to Business Wire.
On National Jeweler's 2008 list of $100 Million Supersellers, the department store chain ranked No. 39 out of 39 (tied with Robbins Bros.), with $125 million in jewelry and watches sales in 2007.
SOURCE FROM:nationaljewelernetwork
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