Mervyns files for bankruptcy

HAYWARD, Calif. Mervyns announced that it and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware to restructure its debt and re-align its business operations.

“Mervyns needs to reorganize its finances and operations due to the state of the economy and difficult operating environment for our industry,” said John Goodman, ceo of Mervyns. “After careful consideration of available alternatives, the company’s management board determined that a Chapter 11 filing was a necessary and prudent step that allows us to operate our business without interruption as we seek to restructure our debt and other obligations in a controlled, court-supervised environment. We are committed to serving our customers and maintaining regular operations as we undertake this reorganization.” 

In conjunction with the filing, the company has received a commitment for a $465 million debtor-in-possession facility from a lender group led by Wachovia Capital Finance as agent. Upon Bankruptcy Court approval, the financing, combined with operating cash flow, will be used to fund the company’s ongoing operations.