Fred’s Commences Voluntary Chapter 11 Proceedings
Fred’s, Inc. (NASDAQ:FRED) today announced that the Company has filed for voluntary relief under chapter 11 of the Bankruptcy Code (“Chapter 11”) in the U.S. Bankruptcy Court for the District of Delaware (the “U.S. Bankruptcy Court”).
The Company has also filed a motion seeking interim and final approval of the U.S. Bankruptcy Court to enter into a proposed debtor-in-possession (“DIP”) financing agreement (the “Financing Agreement”) with certain of the Company’s existing lenders, which would provide for up to $35 million in new funding.
The Company is committed to ensuring an orderly wind-down of its operations, and has commenced liquidation sales at all retail locations, which are expected to close over the next 60 days. The Company expects to continue fulfilling pharmacy prescriptions at most of its pharmacy locations, while it continues to pursue the sale of its pharmacies as part of the court supervised proceedings.
“Despite our team’s best efforts, we were not able to avoid this outcome,” said Joe Anto, Chief Executive Officer at Fred’s. He continued, “I want to thank all of our employees for their hard work and continued support of the Company as we wind-down our operations.”
Fred’s has filed customary motions with the U.S. Bankruptcy Court seeking a variety of “first-day” relief for the filing entities, including authorization to continue paying employee wages and salaries and continue providing employee benefits without interruption, and certain other customary relief.