Limited Stores files bankruptcy with $25.75 million stalking horse bid

By Caroline Salls

Pittsburgh, Jan. 17 – Limited Stores Co., LLC filed Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware.

The company said it entered into a $25.75 million asset purchase agreement with an affiliate of private equity firm Sycamore Partners to acquire its intellectual property and related assets, subject to the receipt of higher or better offers.

If the Sycamore affiliate is not ultimately the high bidder for the assets, Limited will pay it a $772,500 break-up fee and reimburse up to $500,000 of its sale-related expenses.

Competing bids must at least equal the amount of the stalking horse bid, plus the amount of the bid protections and a $250,000 overbid amount.

DIP financing

In conjunction with the bankruptcy filing, the company obtained a commitment for $6 million in debtor-in-possession financing.

The financing will be provided by DIP agent Cerberus Business Finance, LLC and a syndicate of financial institutions comprised of Limited’s pre-bankruptcy lenders, including Cerberus ASRS Holding LLC, Cerberus ICQ Levered Loan Opportunities Fund, LP, Cerberus KRS Levered Loan Opportunities Fund, LP, Cerberus NJ Credit Opportunities Fund, LP and Cerberus Onshore Levered Loan Opportunities Fund II, LP.

The DIP facility will mature on the earliest of 30 days following the date of entry of the interim order if the final order has not been entered, four months from the credit agreement date, the effective date of a Chapter 11 plan, the sale closing date and the date on which all loans and other obligations are accelerated.

Interest on Prime rate loans will accrue at the Prime rate plus 875 basis points, and interest on Libor loans will accrue at Libor plus 1,000 bps.

A total of $4.6 million of the financing will be available on an interim basis.

Debt details

According to court documents, Limited has $10 million to $50 million in assets and $100 million to $500 million in debt.

The company’s largest unsecured creditors are:

• LF Centennial Pte. Ltd. of Kowloon, Hong Kong, with a $32.22 million claim;

• Seven Licensing Co., based in Los Angeles, with a $2.84 million claim;

• LLS Freight of Columbus, Ohio, with a $1.5 million claim;

• U.S. Customs and Border Protection of Middleburg Heights, Ohio, with a $1.46 million claim;

• United Parcel Service, based in Atlanta, with a $1.33 million claim;

• Kenilworth Creations of Warwick, R.I., with a $1.15 million claim;

• John Buell of New Albany, Ohio, with a $1.09 million claim;

• KSC Studio LLC of Hollywood, Fla., with a $1.01 million claim; and

• RDG Global LLC of New York, with a $1 million claim.

Sun Mod Fashions IV, LLC and Sun Mod Fashions V, LLC each own 49.95% of the company’s equity interests.

The Limited’s legal adviser in connection with the restructuring was Klehr Harrison Harvey Branzburg LLP. RAS Management Advisors, LLC served as its restructuring adviser, and Guggenheim Securities, LLC served as its investment banker.

Limited Stores is a New Albany, Ohio-based retailer of contemporary upscale branded women’s apparel. The Chapter 11 case number is 17-10124.

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