The holiday shopping season has barely started, but discount retailer Loehmann's has already filed for Chapter 11 bankruptcy protection, according to the New York Post.
Executives with the retail chain, which operates a fleet of 39 stores, estimate the company is currently carrying $100 million in debt, an amount either equal to or greater than the value of its assets.
This is not the first time Loehmann's has filed for bankruptcy in the past few years, but according to The Post:
"Loehmann’s has been propped up by Whippoorwill Associates, a turnaround firm that took control of the company after it emerged from Chapter 11 in early 2011.
At that time, former owner Istithmar, the Dubai-based sovereign-wealth fund that lost a bundle on its 2007 purchase of Barneys New York, surrendered ownership of Loehmann’s but kept a minority stake.
For more than a year, insiders say cash from Whippoorwill has funded purchases of inventory and other operations, as so-called “factoring” companies that underwrite apparel shipments to retailers have refused to buy Loehmann’s receivables."
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