Frederick’s of Hollywood, which filed for Chapter 11 bankruptcy protection on July 11, has received $5 million in interim financing.
The financing was approved late last Thursday by Judge Ernest Robles of the United States Bankruptcy Court for the Central District of California. Robles also allowed the company to continue honoring employee benefits, as well as all customer-based programs such as returns, exchanges, and gift certificates.
In a statement, Michael Tuchin, attorney for the Hollywood, CA-based intimate apparel retailer and cataloger said that more than 25 vendors, unsecured creditors and suppliers either appeared in court or sent letters stating their support of the action.
Frederick’s intends to use the credit to restock its stores and direct marketing operations with what the company terms “much-needed merchandise.”
In its initial filing, the company attributed its need for bankruptcy protection to a combination of debt incurred from a leveraged buyout and several “costly strategic mistakes by previous management.”
The court set a hearing for August to consider approving an additional $7 million in financing.
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