Seattle A bankruptcy judge said Thursday that Eddie Bauer Holdings can pay employee wages and vendors to keep the retailer operating as it has been. The chain filed for Chapter 11 protection on Wednesday.
U.S. Bankruptcy Judge Mary Walrath of the District of Delaware also gave interim approval of $90 million in loans to fund operations during the bankruptcy procedure. Final approval is still needed for the so-called debtor-in-possession financing. Walrath also gave the company permission to continue to honor gift cards.
As it filed for court protection, Eddie Bauer Holdings said that private equity firm CCMP Capital Advisors LLC had bid $202 million in cash to buy the business. However, the court will ultimately conduct a bankruptcy auction in which other bidders can submit competing offers. CCMP has said it would keep open most of Eddie Bauer's 371 stores and retain the majority of the employees.