David’s Bridal is making preparations for a bankruptcy filing if the retailer can’t reach an out-of-court deal with its creditors, according to people with knowledge of the matter.
The goal is to ease the chain’s debt load of about $760 million with a pre-negotiated restructuring plan either in or out of court, said the people, who asked not to be identified because the discussions are private.
Either way, David’s, based in Conshohocken, Pa., has no plans for major store closures or liquidations, and the business would keep operating regardless of a court filing, the people said.
The wedding-gown merchant has until Nov. 14 to make an interest payment that it skipped last month after initial negotiations with three creditor groups stalled.
Active discussions with debt holders still are underway and the situation remains fluid, the people said, with no guarantee that a filing will happen or end with a prepackaged plan in place.
David’s doesn’t expect the process to materially impact its business or interfere with day-to-day operations or its relationships with vendors and customers, according to the company.
David’s skipped an Oct. 15 interest payment on its $270 million of 7.75 percent unsecured notes due 2020 at the request of its creditors to allow more time to continue negotiations about reworking the company’s debt load.