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Mervyns bankruptcy

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This is a bit off topic since its regarding a company and not me.

I work for Mervyns and I found out recently that Mervyns has stopped communications with a few key lenders. I would assume this is a liquidity issue. So the lenders then stopped shipment of merchandise and tried to convince all other lenders to stop shipments of merch.

Now, the media picked up on this and is saying that Chapter 11 could be filed by next month. (including the Wall Street Journal)

Has anyone heard about this? Will this liquidity issue come back to bite us if we do file chapter 11 and a motion is filed by creditors to change it to chapter 7 because of the liquidity issue? That would mean total asset liquidation, correct?

Can anyone inform me about their opinion on this? My job may be on the line here.

Thanks, everyone!

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If a Chapter 11 is filed and Mervyns wants to continue to operate, they'll need to have DIP financing {debtor in possession} arranged and, a reorganization plan to file with the bk court.

Goodys {a southeast retail chain} filed Chapter 11 last month and, announced as part of the restructuring, they were closing 69 reatil outlets plus, a distribution center in Ar. They laidoff 50 workers in the corp. offices. Ge Capital provied something like $200 million in DIP financing.

If this can't be arranged, a Chapter 7 is inevitable.

Good luck with your job.

http://www.wbir.com/news/local/story.aspx?storyid=59155&catid=2

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Agree with bingo. Chapter 11s mean that the debtor retains control and attempts to reorganize and carry through the BK with willing creditors and a willing court. This can be tough to do. They need financing- which can be tough for a company that has just ran itself into the ground. The 11 debtor attempting a reorg is frequently pushed into a Chap 7 (liquidation).

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Agree with those above. All I can say for you is DON'T send out any bill payments until you have confirmed your check or direct deposit has cleared for your wages. You are still responsible for bounced check fees if you mail out payments and your direct deposit never comes (or the live check bounces).

Most companies with money issues that go to the bankruptcy court do so the day before payroll is issued so they don't have to pay the workers. Employee wages are at the bottom of the trustee's list to be paid so most employees that get hit like this never see a dime of that paycheck.

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NEW YORK (Reuters) - Department store chain Mervyns said on Tuesday that it had filed for Chapter 11 bankruptcy protection "due to the state of the economy and difficult operating environment for our industry."

The retailer said Mervyns stores will remain open as it works through the bankruptcy process.

Mervyns said it has received a commitment for a $465 million debtor-in-possession facility from a lender group led by Wachovia Capital Finance Corp.

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Looks like they have secured financing and they are planning on reorganizing and working through it. This usually means selling off and closing some of the least profitable stores and negotiating with creditors so they get at least a % of what they are owed. This type of Chapter 11 line of credit usually has major strings attached (ie: security interests, ownership interests, or management decisions). After all, the new creditor doesn't want to throw good money after bad.

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I too, work for Mervyns. I have been searching the web for answers. I found this forum and read your comments. So I joined. I have spoken with my store manager and he has explained the whole situation to us. Which is pretty much what we have all read today. One of the AM's has been with Mervyns for 30 years and has seen similar situations in the past. I have confidence in what my management has told me.

If you have concerns about your employment with Mervyns, talk to your store manager or an AM. I did! My only concern is my paycheck being good (Good point Methuss). I will be asking that question tomorrow at our team meeting.

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I heard on ABC TV news earlly this morning, July 30th, that Mervyns indeed has filed for Chapter 11 Bankruptcy. Makes me sad because Mervyns has been one of my favorite places to shop for many years. They had, about 2 or 3 years ago, closed all but 1 of their stores in Colorado. The only one left is in Grand Junction. However, during the winter months when I am in Arizona I have shopped Mervyns dozens of times including a $500 shopping spree I took my 84 year old Mother on just a few months ago. Hope they can survive.

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I too, work for Mervyns. I have been searching the web for answers. I found this forum and read your comments. So I joined. I have spoken with my store manager and he has explained the whole situation to us. Which is pretty much what we have all read today. One of the AM's has been with Mervyns for 30 years and has seen similar situations in the past. I have confidence in what my management has told me.

If you have concerns about your employment with Mervyns, talk to your store manager or an AM. I did! My only concern is my paycheck being good (Good point Methuss). I will be asking that question tomorrow at our team meeting.

Your assistant manager {that's a long way down the food chain} is telling you what his regional VP told him and the other managers on a conference call. He's a long way from knowing the whole story.

You can bet Mervyns is gonna be a smaller chain before this is all over.

I hope things work out for you but, take everything anyone tells you with a grain of salt because, they have no earthly idea how this will play out {at this stage anyway}.

I'd stronly suggest anyone employed at Mervyns to start updating their resume and doing some networking just in case.

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Your assistant manager {that's a long way down the food chain} is telling you what his regional VP told him and the other managers on a conference call. He's a long way from knowing the whole story.

You can bet Mervyns is gonna be a smaller chain before this is all over.

I hope things work out for you but, take everything anyone tells you with a grain of salt because, they have no earthly idea how this will play out {at this stage anyway}.

I'd stronly suggest anyone employed at Mervyns to start updating their resume and doing some networking just in case.

Good advice. In addition to my "regular job," I do some consulting work and one of the things I have done over the years is outplacement counseling. Bankrupt, taken over, downsized, merged, whatever - the company hires me as a "service" to the people it plans to can. I worked with Sprint when they laid off 15,000+ in the Kansas City area alone in 2001. Trust me, it's a huge mess and no one really knows what's going on.

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Good advice. In addition to my "regular job," I do some consulting work and one of the things I have done over the years is outplacement counseling. Bankrupt, taken over, downsized, merged, whatever - the company hires me as a "service" to the people it plans to can. I worked with Sprint when they laid off 15,000+ in the Kansas City area alone in 2001. Trust me, it's a huge mess and no one really knows what's going on.

:shock: I couldn't comprehend what a day in your extra job might be like. That would be really sad to me. I bet you see a lot of employees that were good that just were in the wrong place at the wrong time.

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