Belk filed for bankruptcy protection with a lender-supported reorganization plan that cut its debt load by about $450 million.
The department store retailer, which pledged no store closings as part of its bankruptcy, completed its financial restructuring through an expedited “pre-packaged, one-day” reorganization. Belk, which operates 291 stores, filed for bankruptcy on February 24, and its plan was approved by the court on Feb. 25.
Belk’s filing was expected. In late January, the company said that it was planning to file for Chapter 11 with a plan to recapitalize its business and reduce its approximate $1.9 billion debt burden, by approximately $450 million. The plan leaves Sycamore Partners as the majority owner of Belk. It had the support from lenders representing nearly all of the company’s term loan claims and would pay unsecured claims.
“The COVID-19 pandemic directly resulted in drastic declines in sales, revenue, and liquidity,” said Belk CFO William Langley in a Tuesday filing alongside the bankruptcy.