April 18, 2003
Bankrupt FAO Gets Additional Funding
FAO Inc. said yesterday that additional support from its vendors and lenders has allowed it to reach an agreement regarding final terms with its new lenders, led by Fleet Retail Finance and the group of investors purchasing $30 million of its convertible preferred stock. As a result, FAO expects its confirmed plan of reorganization to become effective early next week, at which point it will emerge from bankruptcy and begin making distributions to creditors. The group is led by Hancock Partners and Kayne Anderson Capital Advisors and includes Fred Kayne, chairman of FAO Inc.; Richard Kayne, a board member and CEO of Kayne Anderson; and Saks Inc. The company also announced that its right to use cash collateral has been extended through April 24. The extension was consented to by the company's existing lenders at a hearing yesterday at the U.S. Bankruptcy Court for the District of Delaware.