Hancock Fabrics, Inc. announced this week that it has emerged from Chapter 11 bankruptcy protection after successfully restructuring its business operations and satisfying the conditions to effectiveness set forth in the Plan of Reorganization (the “Plan”) confirmed by the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) on July 22, 2008. In conjunction with the Plan, Hancock Fabrics has successfully closed a $100 million exit financing facility provided by GE Commercial Finance Corporate Lending and has issued $20 million of secured notes and warrants in connection with a rights offering to certain of its shareholders.
“This is a huge milestone and a very happy day for Hancock Fabrics and all of our associates, customers, business partners and shareholders. We are extremely pleased to have confirmed a Plan of Reorganization that provides for the payment in full of all of our creditors,” said Jane Aggers, President and Chief Executive Officer of Hancock Fabrics. “Through this restructuring process we have effectively addressed our real estate portfolio, as well as financial and operational challenges, creating a strong foundation for the future success of Hancock Fabrics. The Company now has a stronger balance sheet, cash to fund operations and a streamlined store portfolio that will allow us to compete successfully in our industry. The rapid and successful restructuring of Hancock Fabrics is a testament to our outstanding associates, supportive suppliers and professional partners, and we appreciate their hard work and dedication throughout this process.”
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