No prepack for Linens 'N Things as it files for chapter 11
Just as we thought they would do: Linens 'N Things abandoned any thoughts of a prepackaged bankruptcy and filed voluntary chapter 11 today. They'll be closing 120 stores. GE Capital, its secured lender before the filing, is supplying the $700 million of debtor in possession financing.
We hear that Apollo and the bondholder steering committee, of which Apollo is a member --the company was scarfing up tons of bonds before the company filed to protect its equity position in the event of debt for equita y deal -- were at odds. The committee naturally wanted Apollo to pony up more cash to inject into the company and they weren't so thrilled with that idea.
Complicating the bankruptcy, now that Apollo owns a significant bond position, they're now setting up to clash heads with Linens' other equity sponsors: Silver Point Capital and NRDC Real estate advisors...
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