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Industry: Email Alert RSS FeedMorse Shoe obtains DIP financing - debtor-in-possession
Discount Store News, March 18, 1991
Morse Shoe Obtains DIP Financing
CANTON, Mass. -- Morse Shoe, which filed Chapter 11 last month, has obtained $140 million in debtor-in-possession (DIP) financing to carry on its business, which includes 562 leased departments in a dozen discount chains.
The company has most of its leased sections in three chains; 186 in Hills, 130 in Bradlees and 102 in ShopKo, with sales in discount stores overall accounting for approximately $201.2 million, or 35% of its $575 million volume last year.
Morse is a creditor of Hills, which filed for bankruptcy last month. The debt is Morse's sales in Hills prior to the discounter's filing.
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The company said the debt resulting from a $263 million management-led leveraged buyout in 1987 was the prime cause of the bankruptcy filing. It owes the First National Bank of Boston and other banks $91 million, while about $276 million (including interest) of subordinate notes are outstanding, as is another $51 million in liabilities. Assets of $353 million include $109 million in goodwill.
The DIP funding is coming from a group of six banks headed by The Bank of Boston.
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