Judge Christopher Sontchi of the U.S. Bankruptcy Court for the District of Delaware in Wilmington approved the final DIP and cash use for private equity-backed Linens Holding Co. after objections were resolved. Debtor counsel Mark Collins of Richards, Layton & Finger PA said the objections were mainly over landlord and state tax issues.
The $700 million DIP loan from prepetition lender GE Capital Corp. includes $400 million for letters of credit and carries an interest rate of prime plus 175 basis points or LIBOR plus 325. If Linens defaults on the DIP, pricing will increase by 200 basis points.
Linens filed for Chapter 11 protection in Wilmington on May 2, blaming a decline in its profitability and liquidity. The company was unable to increase sales and improve productivity.
Leon Black's New York private equity firm, Apollo Management LP, owns 99.59% of the equity in Linens. Apollo purchased Linens for $1.3 billion in a February 2006 buyout. - Jamie Mason
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A Delaware judge on Wednesday gave the parent of Linens 'n Things Inc. final approval to tap its $700 million debtor-in-possession loan and cash collateral.
