Court approves Goody's first day motions

KNOXVILLE, Tenn. Goody's Family Clothing announced it has received approval from the United States Bankruptcy Court for the District of Delaware for its first day motions. These motions were submitted June 9 as part of Goody's voluntary filing for reorganization under Chapter 11 of the U.S. Bankruptcy Code.

The company received preliminary approval to engage an agent to conduct store closing sales at the 69 stores identified to be closed as part of the plan filed with the court on Monday. If the court approves the agent on Friday, the store closing sales would commence as early as this weekend.

Goody's also received court approval for a $210 million in debtor-in-possession (DIP) financing to use for working capital and to provide adequate liquidity while it works to reorganize the business. The DIP financing includes $175 million in DIP financing under a revolving credit facility from General Electric Capital, $15 million in DIP financing under a term loan facility from GB Merchant Partners, LLC, and $20 million in DIP financing under a junior term loan facility from PGDYS Lending LLC.

"Securing court approval for our first day motions was a critical first step in Goody's reorganization process," said Paul White, Goody's Chief Executive Officer. "These approvals will allow us to continue operations as usual so we can focus on emerging from Chapter 11 as a much stronger company that is better positioned to reach its full potential."