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10 Once-Bankrupt Companies Primed for a Comeback (Update 1)

8. Eddie Bauer

Eddie Bauer a longtime favorite for outdoor gearheads with over 8,000 employees spread between nearly North American 400 outlets filed for bankruptcy in June 2009, after a debt maturity coincided with a sharp retraction in consumer spending in its high-end retail market.

In the quarter prior to its bankruptcy, Eddie Bauer's lost $44.5 million, or $1.44 a share on a nearly 14% drop in year-over year sales. With its near half-billion dollar debt load, the recession proved insurmountable, even with cost-cutting efforts.

The company entered a pre-packaged bankruptcy and agreed to sell itself to private equity firm CCMP Capital Advisors for $202 million in a "stalking horse bid" that's used to get a sale process going in bankruptcy courts. A month later, private equity firm Golden Gate Capital relented, paying $286 million for the retailer after outbidding retailers like Iconix Brands (ICON)

Now the questions is how Golden Gate Capital will look to exit the investment. In May 2010, the firm sold shares in popular retailer Express (EXPR), a company that it had a 75% ownership in at the time. Express shares have since rallied over 50% after a lower than expected IPO pricing.

In April, Golden Gate, Veritas and Goldman Sachs (GS) sold their shares in wireless equipment maker Aeroflex Holdings (ARX), which have since fallen over 20%.

Golden Gate hasn't disclosed any sale plans and it's been a big dealmaker in 2011, buying up Lawson Software for $2 billion and California Pizza Kitchen for $470 million, while it also recently closed a $3.5 billion fund, according to New York Times reports
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