A Delaware bankruptcy judge has granted Liberated Brands LLC emergency access to $25 million in debtor-in-possession financing, marking a critical step in the company’s fight for survival as it navigates a massive financial crisis.
In a dramatic courtroom decision Tuesday, U.S. Bankruptcy Judge Kate Stickles authorized the outdoor and athletic clothing retailer to tap into part of its $35 million financing package. This approval serves as a temporary measure to get the company through until a full hearing on March 4. Liberated Brands, which filed for bankruptcy just days ago, revealed it was operating with a mere $3.3 million in cash.
A Lifeline Amid Financial Chaos
The court’s decision provides a vital lifeline to Liberated Brands, but not without scrutiny. The company’s largest secured creditor, JPMorgan Chase, will supply the funds, which are meant to bridge the gap and keep the company afloat. However, this approval comes with some key conditions. The company had to agree to defer using its revenue as collateral until the final hearing. This move allows other creditors to voice objections, ensuring a fairer process.
