FAO reaches standstill agreement through Jan. 10

By Sara Rosenberg

New York, Dec. 23 - FAO Inc. reached a standstill agreement with its lending group under which banks have agreed not to take any action regarding the company's credit facility through Jan. 10. However, the banks can terminate the credit agreement upon three days' notice.

Wells Fargo Retail Finance LLC is the agent for the syndicate group.

The company expects the standstill agreement to buy some time during which it can work with its bank lenders and its trade suppliers to improve liquidity and prospects for long term success, according to a news release.

FAO is a King of Prussia, Pa. children's specialty retailer.

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