Court Approves $8 Million for Clothestime
Clothestime Inc. won court approval Thursday to receive $8 million in financing to continue paying vendors and operate its remaining stores while undergoing bankruptcy reorganization proceedings.
The interim financing from CIT Group/Business Credit Inc. was approved in U.S. Bankruptcy Court in Santa Ana. The ailing chain entered Chapter 11 proceedings Dec. 8.
Clothestime’s official creditor’s committee supported the financing request, according to court filings.
Clothestime’s president and chief operating officer, Norman Abramson, said the funding “will provide our vendors with the necessary financial assurances essential to our operating on a business-as-usual basis.”
U.S. Bankruptcy Court Judge John J. Wilson earlier approved the Anaheim-based company’s plan to close 137 of its 550 locations. Clothestime is one of a growing number of specialty store chains that have been forced into reorganization proceedings by increased competition and changing consumer buying patterns.
The company will return to Wilson’s Santa Ana courtroom in January to request approval to use more of the $40-million financing package being made available by CIT.
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