Orchard Supply Hardware Stores (NASDAQ:OSH), a neighborhood hardware and garden store focused on paint, repair and the backyard, today announced that the U.S. Bankruptcy Court for the District of Delaware has approved all of the First Day Motions related to its voluntary Chapter 11 process initiated June 17, 2013. These motions collectively will enable the Company to continue operating its business as usual as it completes its Chapter 11 case.
Among the approved motions, the Court granted Orchard access to $177 million in debtor in-possession (“DIP”) financing from Wells Fargo Bank, the Company’s existing ABL lender, and its Term Loan Lenders. This financing, in addition to Orchard’s ongoing cash flow, will ensure the Company is able to continue meeting its financial obligations throughout the Chapter 11 case.
The Court also approved motions giving Orchard authority to, among other things, pay employee wages and benefits as usual throughout the Chapter 11 process, including health and medical benefits, paid time off, expense reimbursement and other incentive programs as well as maintain its Club Orchard customer rewards program, continue coupons and promotions, honor its gift cards and otherwise serve its customers as usual. Additionally, Orchard was granted approval to accept bids from companies to manage store closing sales for an initial eight stores, with potential additional stores to be determined as the Chapter 11 process continues.
“The motions approved today will help ensure we continue to operate our business as usual and uphold our commitments to all of our stakeholders while we work to achieve our financial objectives,” said Mark Baker, Orchard President and Chief Executive Officer. “This is a very important milestone in the Chapter 11 process, and we thank the Court for its careful consideration of our requests. We are confident that Orchard is on the right path for long-term success through the actions we are taking with our business and certain stores. We are grateful for the support we have received from our lenders, associates, customers and supplier partners as we work to achieve a sustainable capital structure for our business.”
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