On Tuesday, the Texas bankruptcy court overseeing the case granted final approval for the retailer’s proposed $675 million debtor-in-possession financing package. The company had also entered the proceedings with a proposed $750 million exit financing facility, meant to help a potential restructured version of the company gain its footing when it leaves bankruptcy court.
“Vendors have expressed willingness to resume their relationships with the debtor, and replenish the debtors’ inventory,” according to proffered testimony on Tuesday by Neiman’s chief restructuring officer Mark Weinsten, managing director at consulting firm Berkeley Research Group LLC. “And the debtors will continue to use their cash on hand to rebuild their inventory.”
That Neiman’s proceedings began during the unprecedented global pandemic that essentially forced it to temporarily close stores in mid-March, cutting off revenue; that a bankruptcy filing in this context prompted concerns among vendors, which indicated they would stop shipping products until the company could demonstrate it could still be viable, and that the retailer obtained bankruptcy financing through “hard-fought negotiations” with groups of existing lenders.
But even though Neiman’s entered its Chapter 11 proceedings with roughly $100 million in cash, it experienced a “negative cash flow” of about $300 million during the first two months of the bankruptcy, while its stores stayed closed, according to the company.
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