Discounter Loehmann’s files for bankruptcy a 3rd time

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Posted: Tuesday, December 17, 2013 12:00 am

Loehmann’s Holdings Inc., the New York-based seller of discounted designer goods operated by Whippoorwill Associates Inc., has sought bankruptcy protection for a third time.

Loehmann’s listed assets of as much as $100 million and debt of as much as $500 million in a Chapter 11 petition filed in U.S. Bankruptcy Court in Manhattan late Sunday.

Started by Frieda Loehmann in Brooklyn in 1921, the chain has 40 stores in 11 states that sell designer goods at discounts of 30 percent to 65 percent, according to the company’s website.

Loehmann’s sought Chapter 11 protection for the first time in May 1999. The company blamed that filing on declining sales and burdensome debt. It emerged from bankruptcy the following year after cutting more than $140 million of debt, closing 25 stores and rejecting takeover offers from two competitors.

The company filed for Chapter 11 protection a second time on Nov. 15, 2010, and emerged in March 2011 after reducing long- term debt by about $110 million. The reorganization was financed in part with a $25 million investment from Istithmar Retail Investments and Whippoorwill, the owner of 70 percent of the secured notes. Istithmar retained a minority stake in the reorganized company.

Istithmar bought Loehmann’s in 2006 for $300 million. Crescent Capital Investments Inc., an Atlanta-based private equity firm, had acquired the chain in 2004 for $177 million, according to Standard & Poor’s.

Loehmann’s is seeking court approval of auction procedures for the selection of a liquidation firm to assist with store-closing sales. A joint venture composed of SB Capital Group LLC, Tiger Capital Group LLC and A&G Realty Partners LLC would be the opening bidder at an auction.

The bid provides for a purchase price of $19 million.

Loehmann’s asked the court to speed up the transaction and requested final approval of the sale no later than Jan. 2, 2014, according to court papers.

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