Pacific Sunwear Exits Bankruptcy

Pacific Sunwear (Anaheim, Calif.) won court approval to exit bankruptcy. The decision came after the retailer submitted a reorganization plan that included cutting a large portion of its debt, closing some stores and negotiating lower rents with some of the malls where it operates.

According to Bloomberg, the retailer is slashing its debt thanks to a deal with affiliates of private equity firm Golden Gate Capital (San Francisco), who is also its senior lender. The company will reduce the amount the retailer owes in exchange for all of the retailer’s stock. PacSun initially owed $88 million and now will only owe $30 million.

The retailer entered bankruptcy in April, and since then, it closed 10 to 20 stores. Before entering bankruptcy, it operated 590 stores.