USA: Spiegel Issues Chapter 11 Warning
The Illinois-based company said problems at its credit card operations mean it has had to pay back $2.2 billion of its secured bonds sooner than planned which in turn has left it searching for alternative funding.
"A principal source of liquidity for the company has been its ability to securitise new credit card receivables that it generates and receive excess cash flow from the trusts," it said in a news release.
"If the Spiegel Group is unable to find alternative sources of financing, it would expect to file for protection under Chapter 11 of the US Bankruptcy Code in the near future."
Earlier this month, Spiegel said its CEO Martin Zaepfel had retired and would be replaced in the interim by turnaround expert William Kosturos who would also serve as chief restructuring officer. It also named James Brewster as senior vice president and CFO.
And late last week, the company announced it had settled a settled a civil lawsuit filed by the Securities and Exchange Commission who accused it of failing to make public in 2002 its auditor's concerns about the firm's future.
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