Filing Does Not Apply to Parent Company, The Children's Place Retail
Pursuing Transfer of Substantial Portion of Disney Store North America
Business to The Walt Disney Company Under Chapter 11 Case
SECAUCUS, N.J., March 26, 2008 (PRIME NEWSWIRE) -- Hoop Holdings, LLC, a subsidiary of The Children's Place Retail Stores, Inc. (Nasdaq:PLCE), today announced that Hoop Holdings, LLC and its subsidiaries ("Hoop") D/B/A Disney Store North America ("DSNA") have voluntarily filed petitions under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware, and the Canadian subsidiary expects to file under the Companies' Creditors Arrangement Act in Toronto, Canada. Hoop intends to pursue the transfer of a substantial portion of the DSNA business to an affiliate of The Walt Disney Company. Neither Hoop's parent company, The Children's Place Retail Stores, Inc., nor any of its parent company's other subsidiaries is commencing a Chapter 11 case.
These filings follow an extensive review of various strategic alternatives for the DSNA business, which is run by Hoop pursuant to a license agreement with The Walt Disney Company. Hoop and its parent company have been engaged in advanced negotiations concerning the transfer of a substantial portion of the DSNA business to The Walt Disney Company. In connection with these negotiations, Hoop's Board of Directors has determined, with the limited strategic and financial options available under the license agreement that its only alternative was to file bankruptcy.
Through these proceedings, Hoop expects to complete an orderly wind-down of its affairs. The transaction that is currently being negotiated is being pursued in order to maximize proceeds available to Hoop stakeholders. The transaction under negotiation is subject to the satisfaction of certain conditions, including approval of the U.S. Bankruptcy Court and the Canadian Court, and is targeted for completion by April 30, 2008.
In order to assist in the financing of the wind-down of Hoop's affairs, and subject to court approval, Hoop has executed a debtors-in-possession credit facility with Wells Fargo Retail Financing, consisting of a $35 million revolving credit facility, including a sub-facility for letters of credit.
Hoop has appointed a Chief Restructuring Officer, Perry M. Mandarino of Traxi, LLC, a firm that specializes in restructuring. Mr. Mandarino will work with Hoop's Board in guiding the business through the Chapter 11 process.
Hoop Holdings, LLC and its subsidiaries design, contract to manufacture and sell merchandise under the licensed "Disney Store" brand name. As of March 24, 2008, Hoop owned 322 Disney Stores in North America.