Goody's Family Clothing, Inc. and Related Entities Seeks Chapter 11 Protection
Yesterday, June 9, 2008, Goody’s Family Clothing, Inc. and 19 of its subsidiaries and affiliates sought bankruptcy protection in the United States Bankruptcy Court for the District of Delaware. The case is being administered under case number 08-11133.
According to the affidavit filed in support of the bankruptcy petitions and related first-day motions, Goody’s is a privately held Tennessee corporation owned by a Delaware entity, Goody’s Holdings, Inc., a non-debtor. The debtors operate specialty stores that sell clothes, shoes, accessories and gift items. In addition to website operations, the debtors operate 355 specialty stores throughout the southern and central United States.
According to the affidavit, events leading to the bankruptcy filing include operational losses, tightening of the credit markets, strain on merchandise flow and underperforming stores in the chain. Prior to the bankruptcy filing, Goody’s closed 18 stores, and, according to the affidavit, the debtors plan to close an additional 69 stores.
The affidavit indicates that the debtors began discussions with their major trade creditors prior to the filing to gather support for a plan of reorganization that the debtors expect to file within the first month of these cases.
The Honorable Christopher S. Sontchi has been assigned to the cases.
