The private equity market has experienced a series of small and mid-sized bankruptcies over the past few months, but now it’s got a big one: Linens ‘n Things filed for Chapter 11 down in Delaware this morning, and announced plans to close 120 of its more than 500 stores. Apollo Management had taken the Clifton, N.J.-based company private in late 2005 for $1.3 billion.
Linens ‘n Things had been treading water for most of the year, including a mid-April deferral of a $16 million interest payment on its bonds. That move prompted the retailer’s lenders to stop making new loans, and both sides entered into negotiations about some sort of debt restructuring. There also were reports that Apollo was shopping for a buyer.
Neither effort bore fruit, thus leading to today’s filing. Linens ‘n Things did say that it had secured a $700 million debtor-in-possession financing from existing lender GE Capital, and that it had hired Michael Gries to oversee the financial restructuring
Here is a downloadable copy of the Chapter 11.