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August 6, 2018 – J&M Sales, Inc (National Stores, Inc.) and nine affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 18-11801. The Company, a 344 store chain operating in twenty-two states and Puerto Rico (d/b/a Fallas, Fallas Paredes, Fallas Discount Stores, Factory 2-U, Anna’s Linen’s by Fallas and Falas) is represented by Peter J. Keane of Pachulski Stang Young & Jones. Further engagements include Katten Muchin Rosen as general bankruptcy counsel and Imperial Capital, LLC as investment banker. In a press release announcing the filing, the Company noted several root causes of its financial and operational decline, “Like many retail concerns, National Stores has suffered financial setbacks from certain underperforming stores. This has been exacerbated by severe weather in various regions, such as Hurricane Maria, resulting in the prolonged, temporary closure of damaged stores and loss of revenue. The Company suffered further financial losses resulting from the acquisition of Conway Stores. The strain on liquidity was worsened by the aftermath of the Company’s data breach as access to operating funds diminished.” Looking forward, the press release further notes that the Company “has ample liquidity to fund operations and has received a commitment for up to approximately $108 million in debtor-in-possession financing from its existing lenders.” The Company’s petition notes between 10,000 and 25,000 creditors; estimated assets between $100 million and $500 million; and estimated liabilities between $100 million and $500 million. In a list of unsecured creditors filed with the Court, the Company notes Armouth International Inc. and One Step Up Ltd as having claims of $15.6 million and $10.3 million, respectively.
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