United Retail Group Files for Bankruptcy Protection
February 02, 2012
Rochelle Park, N.J.-based United Retail Group, owner of the Avenue brand of women’s fashion apparel and a subsidiary of Redcats USA, voluntarily has initiated Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of New York, and is pursuing a sale process under Section 363 of the Bankruptcy Code. In addition to the filing, United Retail Group has entered into an asset purchase agreement with an entity controlled by Versa Capital Management, which it intends to submit to the court to serve as the “stalking horse” bid for a court-supervised auction of the business. Versa Capital, a private-equity firm with significant experience in revitalizing retail operations, has agreed to buy the company's assets through the bankruptcy process for cash and the assumption of certain liabilities. Versa Capital has agreed to operate Avenue as a going concern, while keeping the majority of Avenue stores open. United Retail Group has arranged a $40 million Debtor-in-Possession (DIP) facility from its existing revolving credit lender, Wells Fargo, to provide sufficient working capital for Avenue to continue to operate the business as usual. Currently, the company operates 433 Avenue stores in the United States.
RSS
