DEB Stores Holding LLC and certain of its affiliated companies (“DEB” or the “Debtors”) filed for bankruptcy under Chapter 11 of the Bankruptcy Code on December 4, 2014 in the United States District Court for the District of Delaware.
According to the Declaration of Dawn Robertson, Chief Executive Officer of the Debtors, in Support of the Debtors’ First Day Motions (the “Robertson Declaration”), DEB is a mall-based retailer operating 295 retail store locations. In 2011, the predecessor company to DEB, which operated the retail stores under the same name, filed a bankruptcy petition. In that prior bankruptcy, DEB’s current equity holders purchased substantially all the assets of the predecessor company with a credit bid in a 363 sale.
Events Leading to Bankruptcy
According to the Robertson declaration, DEB’s recent performance has suffered due to weakness in the Juniors space and unfavorable mall traffic trends. In October, 2013, DEB began working to reduce costs in an effort to return to profitability. In August and September, DEB attempted to obtain additional cash infusions from its equity holders, without avail. DEB also sought to locate a buyer of the company or its assets. With its continually shrinking liquidity, and unable to locate any entities interested in purchasing DEB as a going-concern, DEB has filed for bankruptcy protection.
Objectives in Bankruptcy