LL Flooring Files Chapter 11

LL Flooring Holdings Inc. (Richmond, Va.) said it has voluntarily entered Chapter 11 reorganization proceedings in the U.S. Bankruptcy Court for the District of Delaware. The retailer intends to use that process to pursue a “going-concern” sale of its business to an interested party. Meantime, it also plans to close 94 of its 300 stores.

Entering Chapter 11 “is intended to provide LL Flooring with additional time and financial flexibility as we reduce our physical footprint and close certain stores while pursuing a going-concern sale of the rest of our business,” said President and CEO Charles Tyson.

To help shrink its footprint, LL Flooring has hired Hilco Merchant Resources LLC, to run closing sales the locations set to be shuttered.

Meantime, the company said it’s in “active negotiations with multiple bidders” to buy the business. In addition, the retailer said it has received a commitment for debtor-in-possession (DIP) financing of up to $130 million from its existing bank group led by Bank of America.
The company said the incremental liquidity provided by the DIP financing, combined with cash generated from the company’s ongoing operations, is expected to support the business as it seeks to emerge from the bankruptcy proceedings.