The firm said in a filing with the Securities & Exchange Commission on Monday that it has not been able to comply with the financial covenants in its debtor-in-possession credit facility with Salus Capital Partners. It also is unable to file any more financial statements.
As of Dec. 29, 2012, Bakers had an outstanding balance on its credit facility with Salus of $2 million. While Salus has not technically taken any action to accelerate the debt or terminate the agreement, it has notified Bakers of its default and has refused to fund any further inventory purchases.
Bakers already has liquidated inventory at approximately 150 of its stores, for about $8.7 million. It has 56 stores left, which it also has to soon liquidate, unless a buyer for the firm is found. The firm said it is in the process of winding down its business “in an orderly fashion over the next couple of months.”
Reports last week said Bakers claimed to be in talks with a potential buyer in the fashion retail business.
Also last week, Bakers abandoned its plan to reorganize and restructure its business. With more debt than assets on Bakers’ balance sheet, common stockholders of the firm are not expected to recover any money.