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EX-99.2
PRESS RELEASE DATED SEPTEMBER 8, 2000
STROUDS, INC. RECEIVES APPROVAL OF FIRST-DAY ORDERS IN CONNECTION
WITH VOLUNTARY CHAPTER 11 RESTRUCTURING
$50 MILLION DIP FINANCING GRANTED INTERIM APPROVAL
CITY OF INDUSTRY, CALIF. - SEPTEMBER 8, 2000 - Strouds, Inc. (Nasdaq: STRO)
announced today that it has received Bankruptcy Court approval to, among
other things, pay pre-petition and post-petition employee wages, salaries and
benefits during its voluntary restructuring under Chapter 11, which commenced
on September 7, 2000.
The Court also approved interim debtor-in-possession (DIP) financing for
immediate use by the Company to continue operations, pay employees, and
purchase goods and services going forward. In conjunction with the filing,
Strouds received a commitment for up to $50 million in DIP financing from The
CIT Group/Business Credit and Foothill Capital Corporation. The hearing on
the final DIP agreement has been set for September 28.
Chairman and Chief Executive Officer Charles R. Chinni said he was pleased
with the Bankruptcy Court's prompt approval of its first-day orders and
interim DIP financing.
"We expect the DIP financing to provide adequate funding for our
post-petition trade and employee obligations," Mr. Chinni said, noting that
the Company has been in contact with its major vendors, who have indicated
that they will support Strouds during the restructuring process with
post-petition shipments of merchandise to increase the Company's in-stock
position for the upcoming holiday season. "By availing ourselves of the
Chapter 11 process prior to the start of the critical holiday buying season,
we will assure the continued flow of merchandise to our stores," he said.
The Court also granted approval for the Company to honor all obligations to
customers including return privileges, gift certificates, special orders and
other customer programs during the restructuring period.
The Company filed Chapter 11 petitions in the U.S. Bankruptcy Court for the
District of Delaware in Wilmington on September 7, 2000.
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Strouds, Inc., the Linen Experts -Registered Trademark-, is a specialty
retailer of bed, bath, tabletop and other home textile products. The Company
currently operates 70 stores in five states and also markets its home
products through its web sites, www.linenexperts.com and www.strouds.com.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS DISCUSSED
IN THIS NEWS RELEASE ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISK AND
UNCERTAINTIES, AND ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THE COMPANY'S
PRESENT EXPECTATIONS. AMONG THE IMPORTANT FACTORS THAT COULD CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED IN THE FORWARD- LOOKING
STATEMENTS ARE: CUSTOMER DEMAND AND TRENDS IN THE HOME TEXTILES INDUSTRY, THE
PERFORMANCE OF STORES IN THE NEW MARKETS, THE EFFECT OF ECONOMIC CONDITIONS,
THE IMPACT OF COMPETITIVE OPENINGS AND PRICING, SUPPLY CONSTRAINTS OR
DIFFICULTIES, AND OTHER RISKS DETAILED IN THE COMPANY'S SECURITIES AND
EXCHANGE COMMISSION FILINGS.
