GENESEO – Payless Shoesource announced that it is filing for bankruptcy and closing many stores nationwide, including the store in Genesee Valley Plaza.
A new web page on Payless’ website dedicated to the restructure says that on April 4, 2017, Payless’ North American entities, as well as two foreign Hong Kong-based entities involved in logistics (CBL) and supply chain (DAL), filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Eastern District of Missouri to facilitate the financial and operational restructuring necessary to strengthen its balance sheet and position the Company for long-term success. Payless is also filing for recognition of the U.S. Chapter 11 proceedings under Part IV of the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice.
“We intend to use the Chapter 11 process to implement a comprehensive path forward to meaningfully enhance our growth profile and profitability, positioning us to continue to thrive as a sustainable business in the face of the retail industry’s radical, unprecedented transformation,” says Payless’ website. “Payless has the strong support of its senior lenders for a consensual restructuring through a Plan Support Agreement (PSA) to reduce debt, materially lower annual cash interest costs, access significant additional capital, and provide a clear path to emergence on an expedited basis. Payless has also negotiated agreements with certain of its existing lenders to provide the Company access of up to $385 million of Debtor-in-Possession financing.”
Payless’ website has a link to a PDF listing of closing stores by state, available here.
Payless clarifies that they will continue to operate its business in the ordinary course in terms of its customers, vendors, partners and associates and, ‘subject to Court approval,’ expects to continue:
Providing associate wages, healthcare coverage, and other benefits without interruption;
Honoring pre-petition obligations to customers, including all gift cards with Payless stores and Payless.com; and
Paying vendors and suppliers in the ordinary course for all authorized goods and services provided on or after the date of the Chapter 11 filing.
Here you’ll find the most up-to-date information, including links to our claims agent site, restructuring information line (844-648-5574 if calling from within the U.S. or Canada, or +1 347-505-5254 if calling from outside the U.S. or Canada), and frequently asked questions. Please check back for updates.