Reuters: Bankruptcy News: UPDATE 1-Orchard Supply files for Chapter 11; Lowe's may buy assets

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UPDATE 1-Orchard Supply files for Chapter 11; Lowe's may buy assets Jun 17th 2013, 06:18 Mon Jun 17, 2013 2:18am EDT June 17 (Reuters) - Orchard Supply Hardware Stores Corp filed for Chapter 11 bankruptcy protection early on Monday, court documents showed, and has reached a prospective agreement to sell the majority of its assets to retailer Lowe's Companies Inc for about $205 million in cash. Orchard, which was spun off by Sears Holdings Corp in late-2011, said it was carrying a high debt load on its balance sheet and that it may not be in a position to make scheduled payments when the first tranche of its debt matures in December 2013. The company said that home improvement retailer Lowe's would act as a "stalking horse bidder" in an auction of Orchard's assets, serving as a minimum offer for the business which could still be topped by others. Management and the board determined that a sale of Orchard through a Chapter 11 process was the best possible outcome for the company and its stakeholders after exploring a range of alternatives, the company said. The company, which generated revenue of $657 million in the 2012 fiscal year, listed total liabilities of $480.1 million and total assets of $441 million, according to a court filing. Orchard said it has secured commitments for $177 million in debtor-in-possession (DIP) financing, which will help it to continue meeting its financial obligations throughout the Chapter 11 case. Link this Share this Digg this Email Reprints

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