dELiA*s granted interim use of $20 million DIP loan, cash collateral

By Kali Hays

New York, Dec. 11 – dELiA*s, Inc. received interim approval to access a proposed $20 million debtor-in-possession facility and cash collateral provided by Salus Capital Partners, LLC, according to a Wednesday order from the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, dELiA*s negotiated the loan with Salus and said that it provides for immediate liquidity to continue operations and to conduct the store closing and going-out-of-business sales while in bankruptcy.

According to the financing motion, the maximum loan amount will be automatically and permanently reduced to $10 million upon the loan parties’ receipt of a remaining initial guaranty payment under the sale agency agreement.

The DIP loan will mature in one year from the bankruptcy filing date.

Interest will be equal to the greater of the Base rate plus 500 basis points and 9%.

A hearing on final approval of the loan is set for Dec. 23.

The New York-based retail company, which markets and sells apparel and accessories to teenage girls online and through catalogs and a chain of mall-based stores, filed for bankruptcy Dec. 8. The Chapter 11 case number is 14-23678.

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