By Steven Church & Tiffany Kary - Jan 7, 2013 2:29 PM ET
The company was completing a yearlong turnaround when the storm hit, Glenn R. Langberg, Big M’s restructuring officer, said in papers filed yesterday in U.S. Bankruptcy Court in Newark, New Jersey.
“To this day, despite its best efforts, the debtor’s business has not returned to pre-superstorm levels,” he said.
Some retailers may have lost sales because they were forced to shut stores after Sandy struck the East Coast in October, according to the U.S. Census Bureau. The U.S. economic slowdown since 2008 already had driven retailers including Loehmann’s Holdings Inc., Circuit City Stores Inc. and Borders Group Inc. into bankruptcy.
Big M operates 129 stores in eight states, comprising 84 Mandee stores, 35 Annie sez sites and 10 Afaze locations. The company listed assets and liabilities of as much as $100 million each in its Chapter 11 filing.
The company, based in Totowa, New Jersey, said it owes about $15 million to suppliers, consultants, landlords and other unsecured creditors, and $3.2 million to Salus Capital Partners LLC and other secured lenders.
Credit LineThe company is negotiating details on a new $10 million revolving credit line with Salus to finance its reorganization in bankruptcy, Langberg said.
Brothers Leon, Max and Bernard Mandelbaum founded Big M in 1948 after they returned from World War II, according to court documents. The company remains a family owned business.
“We are continuing to operate our 120 plus stores in the ordinary course of business, and we have confidence that we are taking the proper steps toward emerging as a stronger company,” Chairman Alan Mandelbaum said in an e-mailed statement.
CIT Group/Commercial Services Inc. of New York is listed as Big M’s biggest unsecured creditor, owed about $2 million.
The case is In re Big M Inc. 13-10233, U.S. Bankruptcy Court, District of New Jersey (Newark).
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