Bakers Footwear Group filed an emergency motion to enter into an amended credit agreement with Salus Capital Partners LLC and receive a $9.5 million loan, according to court documents filed Tuesday.
The $9.5 million loan would allow the St. Louis-based retailer to refinance its debt, and it would release claims against its existing lender, Crystal Financial LLC. Bakers has a deadline of 9 a.m. on Nov. 16 to secure a new lender under its agreement with Crystal Financial, or the company will be forced to liquidate all of its stores. The company, which filed for Chapter 11 Bankruptcy on Oct. 3, began liquidating 150 out of 213 stores on Nov. 9.
The new financing from Salus would include a revolving loan of up to $8 million and a term of loan of $1.5 million. Bakers would pay 8 percent interest a year on the revolving loan and 16 percent interest a year on the term loan. Bakers has an existing $8.5 million loan from Salus, which a bankruptcy court approved Nov. 7.
An expedited hearing has been scheduled for 11:30 a.m. Nov. 15 for the court to approve the amended loan agreement with Salus, according to court documents. Bakers intends to restructure its business and continue operating its 63 remaining stores.
In fiscal 2011, Bakers reported a loss of $11 million, compared with a $9.3 million loss in fiscal 2010.