Brooks Brothers Group has gotten a loan to help it reorganize through bankruptcy.
Authentic Brands Group LLC and Simon Property Group Inc. won a competition to supply financing to the retailer, offering an $80 million debtor-in-possession loan that has a zero interest rate and no closing fees, reported Bloomberg. The $80 million loan will be provided by ABG-BB LLC, a partnership between the companies.
The terms of the loan reflect the heated competition between ABG-BB and WHP Global, a brand-buying company backed by distressed debt giant Oaktree Capital Management LP, according to the report. Both are reportedly interested in acquiring the retailer. (WHP owns the Joseph Abboud and Ann Klein brands.)
At a court hearing, the bankruptcy court judge said he would sign an order allowing Brooks Brothers to initially borrow $60 million. The company will return to court in the coming weeks to get permission to draw the rest of the money which will be used to find operations while Brooks Brothers tries to find a buyer, Bloomberg reported.
Brooks Brothers said it is encouraged by the continued interest in its assets from potential buyers. Its pre-bankruptcy marketing efforts have generated interest from bidders, and discussions with those parties have continued this week, debtor attorney Garrett A. Fail of Well Gotshal & Manges LLP told the court.
Founded in 1818, Brooks Brothers has more than 250 stores in the United States and Canada, with a total footprint that includes more than 500 stores in more than 70 countries.
“Our priority is to start this important chapter with a new owner that has appreciation for the Brooks Brothers legacy, a vision for its future, and aligns with our core values and culture," owner Claudio Del Vecchio stated when the company announced it was filing for bankruptcy.