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Aeropostale Chapter 11 Petition Filed

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According to the U.S. Bankruptcy Court docket, Aeropostale and ten affiliated Debtors filed for Chapter 11 protection in Manhattan and is represented by Ray C. Schrock, Jacqueline Marcus & Garrett A. Fail of Weil, Gotshal & Manges. Concurrent with its Chapter 11 filing, the Company announced an initial store closure list of 113 U.S. locations, as well as all 41 stores in Canada. Store closing sales are scheduled to begin in the United States during the weekend of May 7, 2016, and in Canada during the week of May 9, 2016. Aeropostale has secured a commitment for $160 million in debtor-in-possession financing provided by Crystal Financial.

The Company notes, “The Debtors’ operations have generally been profitable during the past thirty years; however, declining mall traffic, a highly promotional and competitive teen retail environment, and a shift in customer demand away from apparel to technology and personal experiences all contributed to the Debtors’ declining financial performance.” The Company expects to use the Chapter 11 process to “optimize its store footprint, access additional tools to shed or renegotiate burdensome contracts, resolve its ongoing disputes with Sycamore Partners and achieve long-term financial stability.”

Court-filed documents further note, “Speed is critical to maximizing recoveries for all creditors and preserving jobs of as many of the Debtors’ 14,500 employees as possible. Accordingly, the Debtors intend to proceed towards confirmation of a plan of reorganization on the foregoing aggressive, but realistic, timeframe. In accordance with the milestones above, a plan of reorganization may involve either a stand-alone reorganization of the Debtors’ operations premised on a smaller footprint of profitable stores or a sale to a third-party buyer to be consummated pursuant to a plan. As an initial step along either path, the Debtors are seeking approval of procedures to effectuate the immediate closing of 154 stores.”

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The post Aeropostale Chapter 11 Petition Filed appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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