Tuesday Morning Corp. filed voluntary petitions for protection under Chapter 11 bankruptcy, in response to the strain of the COVID-19 pandemic and related store closures have put on the company, a news release shows.
The Dallas-based home goods off-price retailer plans to close about 230 of its 687 stores with phased approach over the summer. The company has requested bankruptcy court approval to close at least 132 locations in a first phase and eventually its distribution center in Phoenix that supports these stores.
Tuesday Morning has obtained a commitment from its existing lender group to provide $100 million of debtor-in-possession financing, and is required to obtain a commitment for up to $25 million of additional financing, which it is negotiating.
“The prolonged and unexpected closures of our stores in response to COVID-19 has had severe consequences on our business,” CEO Steve Becker said in a statement. “Prior to the pandemic, we were gaining momentum in our merchant organization, growing our vendor base and improving brands, assortment and value for our customers, while investing in our technology and corporate leadership team. However, the complete halt of store operations for two months put the Company in a financial position that can be effectively addressed only through a reorganization in Chapter 11.”
The Ch. 11 filing comes at a time when both J.C. Penney Co. Inc. and Neiman Marcus have filed for Ch. 11 bankruptcy protection as well.
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Texas Lawbook note: Tuesday Morning is being represented by Haynes and Boone restructuring practice group chair Ian Peck and counsel Jarom Yates. Both attorneys are based in Dallas. Peck is also involved in the Diamondback Industries bankruptcy.