Bombay Co. files for bankruptcy
By Thomas Russell -- Kids Today, 10/1/2007
After three years of mounting losses, The Bombay Co. filed for Chapter 11 bankruptcy protection on September 20.
The filing, in the Fort Worth Division of the U.S. Bankruptcy Court for the Northern District of Texas, covers the Top 100 retailer and its wholly owned subsidiaries including The Bombay Furniture Co., BBA Holdings LLC, Bombay International, Bailey Street Trading Co. and BMAJ.
The filing lists assets of $239.4 million and debts of $173.4 million.
It also lists the 40 largest unsecured creditors with claims ranging from $73,005 to $690,823, for a total of $8.3 million. The list included some real estate firms, such as Indianapolis-based Simon Property Group, Chattanooga, Tenn.-based CBL & Associates, and Greensboro, N.C.-based Tanger Properties.
In a press release, the company said the filing was aimed at addressing its financial challenges and identifying a "strategic or financial investor."
It also announced it has secured a commitment for a $115 million debtor-in-possession financing facility from General Electric Capital Corp. and GE Canada Finance Holding Co.
"After considering a wide range of alternatives, this course of action was seen as the best route to help preserve our internationally respected brand while working to secure our future," Bombay CEO David Stewart said in a written statement. "With a tremendous talent pool and an excellent selection of high quality home accessories and furnishings, we are confident that our business will emerge from this process stronger and more competitive. We are very grateful for the dedication and hard work of all our employees and look forward to providing them with a clear road map for success."
The statement went on to say that the company plans to keep operating its stores and Web sites. The company ended the first quarter with 419 stores after closing a net 22 during the same quarter.
The company also will continue to pay employees wages and salaries and benefits during the proceedings and plans to honor its customer service policies, including returns, exchanges, credits and gift cards and pay "post petition" vendors, suppliers and other business partners for goods and services.
The news falls on the heels of the company's $52.8 million loss for the year ended Feb. 3 and a loss of $15.4 million for the first quarter ended May 5.
In June, the New York Stock Exchange suspended the company's stock and moved it to OTC status after shares failed to meet a minimum average closing price of $1 per share threshold over a 30-day trading period.
