CLIFTON, N.J.–In what had almost turned into a fait accompli, Linens ’n Things filed for bankruptcy this morning.
Simultaneously, the big-box retailer secured $700 million in debtor-in-possession financing from General Electric Credit, which will allow it to pay for new orders and provide working capital. The chain said it would continue to operate during reorganization, putting to rest the worst-case scenario speculation that it would liquidate.
As part of the filing, Linens will close 120 stores, but will continue to operate in Canada, where it said it will not file a corresponding bankruptcy action.
The other immediate change at what had been a 589-unit chain is the status of Chief Executive Officer and President Robert DiNicola. As part of the filing, he will become executive chairman and Michael F. Gries, a restructuring consultant and co-founder of Conway Del Genio Gries & Co., will become interim CEO and chief restructuring officer.
Lists of creditors were not immediately available. The filing was in Wilmington, Del.