Eddie Bauer Files For Bankruptcy

Eddie Bauer, which emerged from bankruptcy as a standalone company in 2005 after former owner Spiegel had filed for chapter 11 protection, has just filed for bankruptcy again, the latest casualty of the real "green shoots free" consumer "spending" landscape.

Clothing retailer Eddie Bauer Holdings Inc. filed on Wednesday for Chapter 11 bankruptcy court protection, the latest retail casualty of the recession.

It said CCMP Capital Advisors LLC has bid for its assets. Other buyers may also make bids while the company is under court protection.

The company said in its filing that it is seeking court protection because its financial position was creating uncertainty among vendors that supply its inventory and because its cash flow problems "could severely impede" its operations.

Eddie Bauer said it might not be able to comply with some covenants in its $225 million senior debt or have the cash under its line of credit to make vendor payments in the future.

Eddie Bauer considered refinancing of all or some of its debt, and it considered a reorganization, sale or liquidation through Chapter 11 bankruptcy protection, as well as continued operation on a modified business plan. It now hopes to be sold.

The outdoorsy clothing retailer had $476.1 million in assets and $426.7 million in debt at the time of the filing Wednesday with the United States Bankruptcy Court of the District of Delaware.

Bankruptcy rumors had been swirling as Bellevue, Wash.-based Eddie Bauer struggled with slumping sales amid the recession. It reported a loss for the first quarter of $44.5 million.

Eddie Bauer joins Circuit City, Linens 'N Things, Mervyns and other retail chains that have filed for bankruptcy court protection as consumer spending fell and the recession continued.

Peter J. Solomon Co. has been named financial adviser for the company and Alvarez & Marsal was named restructuring adviser.

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More Bad News For Bankrupt Lehman: CFO Resigns

The bad news for creditors of bankrupt Lehman Bros just keep coming. First, the bankruptcy judge presiding over the case James Peck gets arrested a month ago for mauling his wife, and is likely to be removed from the case, and now interim CFO David Cole, who came on board in October when Alvarez and Marsal was hired to run Lehman in exchange for something like $300,000 a day, has said he will resign to pursue other less mind-numbingly deranged ventures than liquidating the biggest bankruptcy in history. It is not clear if he will still remain at A&M where he is listed as a Managing Director, but we wouldn't blame him at all if he has decided he is totally done with finance in general. After charging $750/hour over the past 5 months for dismantling Lehman, we can easily see how retirement is a feasible endgame. Sphere: Related Content

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Alvarez Asks For $400,000/Day To Let Lehman Creditors Sort Out Their Own Mess

Restructuring consultancy firm Alvarez & Marsal has decided to take the easy way out, and simply give creditors in the Lehman's bankruptcy equity instead of trying to maximize cash recoveries. The bulk of Lehman's residual value (or lack thereof) is contained in its hard to value real estate and private equity assets. According to Bryan Marsal, cited by the Financial Times, A&M has decided to spin the asset pools into two separate companies, and instead of following through on maximizing the value of the liquidating assets and generating as much cash for these as possible, it will simply give creditors equity which may or may not be worth anything at some future point, essentially leaving bondholders to fare for themselves.

This brilliant solution did not come cheap: in a bankruptcy court filed compensation application, A&M is asking that its hard work be rewarded with the paltry sum of $400,000 per work day. A&M requests that for the period from September 15 to November 1, it be paid $14 million dollars for the 26,087 hours that the firm spent on hard liquidating work in the 35 work-day interval. A close read of the application shows just how hard various A&M team members worked: of special notice is Managing Director Daniel Ehrmann who clocked in at an impressive 545 hours for the month and a half period. As a reference, there are 840 work hours in the 35 business days between Sept 15 and Nov 1. Zero Hedge salutes these working men and women's dedication to their craft. We are also keeping our eyes peeled as the other 99 or so advisors in this liquidation submit their fee applications over the next few days, to see just how much it will cost creditors to know they will end up with potentially worthless equity.

As a point of reference, Lehman 6.675% Notes due 1/2012 closed at 11.5 on Friday. We are curious how bondholders will receive this exciting news. Sphere: Related Content

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