Coldwater Creek Commences Voluntary Chapter 11 Proceeding to Facilitate Orderly Wind-Down of Operations
April 11 2014 - 3:51AM
Coldwater Creek Stores and Website
Currently Open and Serving Customers; Liquidation
Sales to Commence at a Later Date
Pre-Negotiated Chapter 11 Plan of
Liquidation Filed With Lender Support to Maximize Creditor
Recoveries Through Reduced Administrative Expenses
Coldwater Creek Inc. (Nasdaq:CWTR) ("Coldwater Creek" or "the
Company") today announced that the Company and all of its U.S.
subsidiaries have filed voluntary petitions under Chapter 11 in the
U.S. Bankruptcy Court in Wilmington, Delaware, in order to
facilitate an orderly wind-down of its operations.
Coldwater Creek's stores and website are currently open for
business and serving customers. The Company expects to commence
sales to liquidate its inventory in early May.
Together with its financial and legal advisors, over the last
six months, Coldwater Creek engaged in a thorough analysis of all
potential alternatives, including a sale of the Company.
Ultimately, the Company and its advisors were unable to find a
potential buyer for the Company or a source of capital to provide
adequate liquidity to fund the Company's ongoing strategic
turnaround initiatives. As a result, the Company's Board of
Directors recently determined that an orderly liquidation of the
business would be the best way to maximize value for the benefit of
the Company's creditors. The Company intends to hold going out
of business sales in the coming months, which are historically busy
shopping periods for Coldwater Creek.
"First and foremost, we are extremely grateful to all of our
associates for thirty years of dedicated service to Coldwater Creek
and to the millions of loyal customers who have enjoyed our award
winning customer service and beautiful and unique
products. Our talented associates continue to impress,
performing their duties with professionalism and grace during this
period of uncertainty," said Jill Dean, President and Chief
Executive Officer of Coldwater Creek. "This difficult decision
follows a comprehensive strategic and financial review of the
business. The Board of Directors has determined that the actions we
are taking represent the best path forward for Coldwater Creek and
its stakeholders. While we are extremely disappointed with
this outcome, the Company's declining liquidity position and the
challenging retail environment, together with the fact that we have
exhausted all other possibilities, requires that we take this
action." She added, "As we begin preparing to wind down our
operations, customers should know that our stores and website
remain open for business and we will be providing information about
the tremendous values that will be available at our inventory
clearance sales in the coming weeks."
In conjunction with its Chapter 11 filing, Coldwater Creek has
received a commitment for $75 million in "debtor-in-possession"
financing from its existing lender, Wells Fargo. Subject to court
approval, this financing will be available to support the Company's
operations during the wind-down process.
Importantly, and in an effort to maximize creditor recoveries
and reduce administrative expenses through a swift and efficient
Chapter 11 process and liquidation, Coldwater Creek has reached an
agreement with its lenders on a Chapter 11 plan of liquidation that
was filed today with the bankruptcy court. The Company has also
reached an agreement with inventory liquidators, Gordon
Brothers Retail Partners, LLC and Hilco Merchant Resources, LLC to
manage the Company's inventory clearance sales. The plan of
liquidation does not contemplate any recovery for holders of the
Company's common stock. The plan of liquidation and related
disclosure statement is subject to approval by the bankruptcy
court.
Additional information for customers, vendors, equity holders
and other interested parties is available on the Company's web site
at www.coldwatercreek.com. Court filings and claims information are
available at a separate web site maintained by the Company's claims
agent, PrimeClerk, at http://cases.primeclerk.com/coldwater or by
calling 1-855-360-2999.
Shearman & Sterling LLP is serving as legal advisor, Perella
Weinberg Partners L.P. is serving as financial advisor and Alvarez
& Marsal is serving as restructuring advisor to the
Company.
Cautionary Statement Regarding Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
One can identify these forward-looking statements by the use of
words such as "expect," "believe," "planning," "possibility,"
"opportunity," "goal," "will," "may," "intend," "anticipates,"
"working toward" and other words of similar meaning. One can also
identify them by the fact that they do not relate strictly to
historical or current facts. These statements are subject to risks
and uncertainties that could cause actual results and plans to
differ materially from those included in the company's
forward-looking statements.
These risks and uncertainties include but are not limited to
(i) the company's ability to obtain Bankruptcy Court approval
with respect to motions in the Chapter 11 cases, (ii)the ability of
the company and its subsidiaries to prosecute, develop and
consummate the plan of liquidation with respect to the Chapter 11
cases, (iii) the effects of the company's bankruptcy filing on the
company and the interests of various creditors, equity holders and
other constituents, (iv) Bankruptcy Court rulings in the Chapter 11
cases and the outcome of the cases in general, (v) the length of
time the company will operate under the Chapter 11 cases, (vi)
risks associated with third party motions in the Chapter 11 cases,
which may interfere with the company's ability to develop and
consummate the plan of liquidation, (vii) the potential adverse
effects of the Chapter 11 proceedings on the company's liquidity or
results of operations, (viii) the ability to execute the company's
business and plan of liquidation, and (ix) increased legal costs to
execute the company's liquidation. In the event that the risks
disclosed in the company's public filings and those discussed above
cause results to differ materially from those expressed in the
company's forward-looking statements, the company's business,
financial condition, results of operations or liquidity, and the
interests of creditors, equity holders and other constituents,
could be materially adversely affected.
CONTACT: Media Inquiries Only:
Michael Freitag, Sharon Stern, Dan Moore
Joele Frank, Wilkinson Brimmer Katcher
Phone: 212-355-4449
All Other Inquiries:
www.coldwatercreek.com