Coppell, Texas-based Alco Stores Inc. and its subsidiary, Alco Holdings LLC, filed voluntary petitions for Chapter 11 relief in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, on Oct. 12.
Debtors expect to continue to operate their businesses as “debtors-in-possession” (DIP) under the jurisdiction of the bankruptcy court and in accordance with the provisions of the bankruptcy code as cases are pending under Chapter 11.
The company entered into a DIP credit agreement, by and among Alco Stores as lead borrower. In connection with the Chapter 11 petitions, the company filed a motion seeking the bankruptcy court’s approval of the DIP credit agreement.
The agent and the lenders agreed to provide a senior secured revolving credit facility in an aggregate principal amount not to exceed $110 million and a senior secured term loan in the original principal amount of $12,675,000, in order to, among other things, repay certain pre-petition obligations, fund the debtors’ Chapter 11 cases and provide working capital for the debtors while the Chapter 11 cases are pending.
In September, the company named Stanley B. Latacha its interim CEO, replacing Richard Wilson, who had been CEO for four years. The company said Latacha previously assisted in the turnaround of five retail chains, including Goody’s and Pamida.
Founded in 1901, Alco is a broadline retailer, primarily serving small communities across 23 states. The company has 198 Alco stores. Its corporate headquarters are located in suburban Dallas, Texas, and its distribution center is located in Abilene, Kansas.