Paul Harris Stores, Inc. (Indianapolis), the specialty retailer known for its branded private-label women's apparel and accessories, announced a voluntarily Chapter 11 bankruptcy reorganization filing. As part of the filing, the retailer will sell most of the remaining assets of its wholly owned subsidiary, The J. Peterman Co. Three of the Company's wholly owned subsidiaries — Paul Harris Retailing, Inc., Paul Harris Merchandising, Inc., and Paul Harris Distributing, Inc. — also filed Chapter 11 petitions. LaSalle Bank National Association will provide up to $45 million of debtor in possession financing in connection with the Chapter 11 filing.
Glenn Lyon, president and ceo, said the company had commenced Chapter 11 proceedings “because of our liquidity problems. However, as a result of the sale of the Peterman assets that yielded an immediate $4.3 million cash infusion and the Chapter 11 financing arranged with LaSalle, we are optimistic that the company will achieve positive fourth quarter results and put itself in position for a successful reorganization.”
As part of its cost-cutting efforts, the retailer severed its employment agreements with executive vp Sally M. Tassani and senior vp of real estate Paul M. Sobol. Tassani will continue to serve as a director ofthe company.