Westlake Village, Calif. — Just over 3 weeks after filing for Chapter 11 bankruptcy, Guitar Center appears ready to already emerge from the process.
In its original filings, the Westlake Village, Calif.-based musical instrument and supplies retailer reported its business of instrument purchases, rentals, repairs and music lessons suffered amid the upheaval stemming from government-mandated shutdowns in response to the COVID-19 pandemic.
At a virtual hearing on December 17, 2020, U.S. Bankruptcy Judge Kevin Huennekens, based in Richmond serving the Eastern District of Virginia, approved Guitar Center’s bankruptcy plan, according to Bloomberg. The retailer expected to emerge from the Chapter 11 process before the end of next week, reducing its debt load by around $800 million.
The company worked out a restructuring support agreement that includes new financing from existing creditors, $165 million in new equity from owner Ares Management Corp., Carlyle Group and Brigade Capital Management, Bloomberg reports. Recently sold bonds will also help pay for the move. The judge noted that creditors will still be paid in full as a result of the new structure, and creditors unanimously supported the deal.
No plans were released regarding Guitar Center’s 297 brick-and-mortar locations. When it originally filed for bankruptcy, the company also hired A&G Real Estate Partners to look at its physical footprint.
SOURCE: www.REBusinessOnline.com