15680 Mon, 11/24/2008 - 11:09am
EDEN PRAIRIE, Minn.–Lenox Group Inc. has filed for Chapter 11 bankruptcy protection and is seeking court approval for $85 million in debtor-in-possession financing.
The company will continue to pursue a sale of the company while under Chapter 11 proceedings. Through an agreement with its lenders, “substantially all” of the company’s assets will be sold to a new entity created by the lenders, in exchange for the forgiveness of a portion of the company’s debt, according to a statement from the company.
The company was put up for the sale nearly one year ago. “After exhausting all other possibilities and considering the current state of credit markets and the economy, we determined that the best way to complete a restructuring of the balance sheet and protect our franchise value was to pursue a sale of the company under court approval in a Chapter 11 proceeding,” said Marc Pfefferle, interim chief executive officer, in a statement. He said the company “is conducting business as usual.”
Net loss for the second quarter of 2008, which was impacted by one-time non-cash charges, was $50.7 million, compared to a net loss of $11.3 million in the year-ago period. Net sales in the second quarter ended June 28, 2008, the most recent figures available, were $76.2 million, compared to $93 million in the comparable prior year period.