Privately-held Wet Seal and two affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 17-10229. The Company, which provides specialty retail clothing and accessories, is represented by Michael R. Nestor of Young Conaway Stargatt & Taylor.
According to documents filed with the Court, “After attempts to develop going-concern restructuring options proved unsuccessful, the Debtors determined, upon consultation with their key constituents, that commencing going-out-of-business sales…through the Debtors’ retail locations and e-commerce website…and the subsequent Chapter 11 Cases provided the best opportunity to maximize value for the Debtors’ estates, creditors and all interested parties. This decision was reached only upon considering all reasonable alternatives, exploring and entertaining creative restructuring solutions, and pursuing both strategic and operational business partners.”
Concurrent with the petition, Wet Seal also filed an emergency motion for an order (i) authorizing the Debtors to assume a consulting agreement with Hilco Merchant Resources and Gordon Brothers Retail Partners and (ii) authorizing the Debtors to continue store closing or similar themed sales in accordance with the agreement and terms of the store closing sale guidelines. Mador Holdings owns 100% of the equity interest in Mador Financing (which also filed for Chapter 11 protection) and Mador Financing owns 100% of the equity interests in Wet Seal and Wet Seal Gift Card.
Wet Seal emerged from a previous Chapter 11 filing in December 2015. The current Chapter 11 petition indicates assets of $10 to 50 million.
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