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Tag: Bankruptcy

Armstrong Flooring awaits approval for auction, receives financing to continue operations 

After filing for Chapter 11 bankruptcy earlier this month, Lancaster-based Armstrong Flooring is looking to auction its assets in a competitive bidding period next month. 

The flooring designer and manufacturer filed a motion in bankruptcy court to sell some or all of its assets. Bidding for the auction would be due June 14 with the auction itself being held June 17. 

A hearing on the motion is set to take place in a Delaware bankruptcy court on May 26. 

As it awaits a ruling on the auction, the court approved Armstrong Flooring to access consensual debtor-in-possession financing totaling $24 million in net new money. 

The financing is expected to provide the company with the liquidity it needs to continue operating as it pursues a sale. 

Lenders Pathlight Capital and Bank of America are providing the $24 million. The two financial institutions previously looked to the court to deny the debtor-in-possession financing and liquidate Armstrong Flooring but have since agreed to finance the company in anticipation of a sale, according to filings. 

Armstrong Flooring has also received approval for a critical vendor motion, which allows it to use $9 million of critical vendor funds to pay off certain pre-petition claims of vendors and service providers. 

According to Armstrong Flooring’s filings with the court, the company began looking into selling some or all of its assets last fall after receiving indications of interest from three potential bidders. 

In response, the company retained Los Angeles-based investment banking firm, Houlihan Lokey Capital, to help with the sale of the company and the consideration of other strategic options. 

Today, Armstrong Flooring has two interested bidders looking to purchase undisclosed assets from the company. One of the bidders has completed the second week of its two-week diligence period and is working with Armstrong Flooring to draft a definitive purchase agreement. 

Whitehall Mall owner files for bankruptcy

The owner of the Whitehall Mall has filed for bankruptcy.

Citing the challenges the COVID-19 pandemic placed on the industry, Washington Prime Group of Columbus, Ohio announced Sunday that it would be seeking Chapter 11 protection.

The company said it is entering Chapter 11 after executing a restructuring support agreement (RSA) with creditors, led by SVPGlobal, that hold approximately 73% of the principal amount outstanding of the Washington Prime Group’s secured corporate debt and 67% of the principal amount outstanding of the company’s unsecured notes

Washington Prime Group will use Chapter 11 to implement a comprehensive and consensual financial restructuring of the Company’s corporate-level debt, it said.

The RSA provides for a deleveraging of the company’s balance sheet by nearly $950 million through the equitization of unsecured notes and a $190 million paydown of the company’s revolving credit and term loan facilities.

“The company’s financial restructuring will enable WPG to right size its balance sheet and position the company for success going forward. During the financial restructuring, we will continue to work toward maximizing the value of our assets and our operating infrastructure,” said Lou Conforti, CEO and director of the Washington Prime Group.

The company has secured $100 million in new money debtor-in-possession financing from the Consenting Creditors to support day-to-day operations during the Chapter 11 process.

The Real Estate Investment Trust said the Whitehall Mall, which features retailers such as Bed Bath & Beyond and Kohl’s, will continue normal operations, as will the other properties it owns.

Lehigh Valley Mall co-owner PREIT files Chapter 11 bankruptcy to help with restructuring

As it tries to navigate the challenges of COVID-19, Philadelphia-based PREIT, co-owner of the Lehigh Valley Mall, filed for Chapter 11 bankruptcy Sunday, a move it said will help it restructure.

On Oct. 14, the real estate investment trust entered into a Restructuring Support Agreement with its bank lenders. It said those banks have agreed to provide another $150 million to help PREIT recapitalize and extend its debt maturity schedule.

In a release, PREIT said the bankruptcy filing will help ensure that it can continue operations while it obtains necessary approvals for its financial restructuring plan.

“Today’s announcement has no impact on our operations – our employees, tenants, vendors and the communities we serve –and we remain committed to continuing to deliver top-tier experiences and improving our portfolio. With the overwhelming support of our lenders, we look forward to quickly emerging from this process as a financially stronger company with the resources and support to continue creating diverse, multi-use ecosystems throughout our portfolio,” said Joseph Coradino, CEO of PREIT.

The company will pay all vendors, suppliers and employees during the Chapter 11 process, he said, adding that the bankruptcy should not impact shareholders. PREIT’s common and preferred shares will continue to trade.

“We are pleased to be moving forward with strengthening the company’s balance sheet and positioning it for long-term success through our prepackaged plan. We are grateful for the significant support we have received from a substantial majority of our lenders, which we expect will enable us to complete our financial restructuring on an expedited basis,” he said.

Whitehall Sears to close

Sears Holdings will be closing 96 more stores, among them is the Sears in Whitehall –

It lasted longer than most, but the Sears store in the Whitehall Mall in Whitehall is now on the list for closure.

Employees in the store told shoppers they expected to be shuttered by January.

According to the company’s website “Going out of Business” sales will begin Dec. 2.

The Sears location sold appliances, tools, home goods and apparel.

It was the last Sears left in Lehigh Valley after rolling store closures over the last few years. Both Sears and Kmart stores are owned by Sears Holdings Corp.

The Kmart in Easton is also supposed to be closing by year’s end.

A Sears in the Berkshire Mall in Wyomissing closed in January.

Sears Holding Corp. filed for bankruptcy in October of 2018. Currently a company called Transformco holds nearly all of the company’s assets.

The Whitehall Sears is one of 96 Sears and Kmart stores that the company just added to the list of store closures.

After this latest round of closures the company said it will operate 182 stores.

Reading Eagle says 81 job cuts will come with impending sale

With the impending sale of the Reading Eagle Co. to Media News Group of Denver, the company has issued a notice that calls for the elimination of 81 jobs effective June 30 – the day the sale is expected to be complete.

In May, MediaNews, a multiplatform news and information company, was the sole qualified bidder for the Reading-based media firm, which filed bankruptcy in March of this year.

MediaNews, which also goes by the name Digital First Media, operates about 200 publications around the country, including the Pottstown Mercury and Berks-Mont News.

The Reading Eagle Co. is the parent company of the Reading Eagle newspaper and radio station WEEU AM 830. It also owns a commercial printer, a marketing company and a weekly newspaper.

The company has a total of 221 employees. A WARN Act notice had been put out last month that gave the possibility all positions could be eliminated in the event a buyer wasn’t found. WARN stands for Worker Adjustment and Retraining Notification.

The 81 jobs represents just under a third of the company’s staff.

Potential buyer IDed for bankrupt Reading Eagle Co.

(Deposit photo) –

The Reading Eagle is reporting that its parent company has attracted a qualified bidder to purchase the company out of bankruptcy.

That bidder was MediaNews Group of Denver, a locally focused multiplatform news and information company with publications around the country, including the Pottstown Mercury and Berks-Mont News.

In a statement to employees published on the paper’s website, the Reading Eagle Co.’s president and CEO, Peter Barbey, said:

“We have received two bids to purchase Reading Eagle Company’s assets. One of the bids is unqualified. The other bid is qualified. The qualified bid is from MediaNews Group, which also operates under the name Digital First Media. Since there is only one qualified bid, the auction has been cancelled. The qualified bid has neither been accepted nor rejected, and we continue to work with MediaNews Group to resolve certain outstanding issues.”

The Reading Eagle Co. is the parent company of the Reading Eagle newspaper and radio station WEEU AM 830.

It has 221 employees.

Any sale would need to be approved by a bankruptcy judge.

Efforts to reach MediaNews Group have not been successful.

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