Filene's Basement files Chapter 11; 17 stores to be sold

Filene's Basement today filed to reorganize under Chapter 11 of the federal bankruptcy code in the US Bankruptcy Court for the District of Delaware. It also announced an agreement with an affiliate of Crown Acquisitions to purchase 17 of the chain's 25 stores, including the flagship stores in Boston and Union Square, NY.

The contract with Crown is subject to a bankruptcy court auction under which additional offers for the 17 stores, the remaining Filene's Basement stores, and other Filene's assets will be solicited. The auction is expected to be held in approximately five weeks, subject to the approval of the court.

Crown, which is based in New York, intends to continue to operate the stores under the Filene's Basement name, while maintaining the chain's value merchandising model.

Advisors to Filene's Basement include Alan Cohen, who was engaged as chief restructuring officer, and Pachulski, Stang, Ziehl & Jones LLP, which was retained as counsel. Morris Missry and Scott Lesser of Wachtel & Masyr LLP and Arthur Steinberg of King & Spaulding advised Crown Acquisitions in connection with this matter.

When reached for comment, Cohen said that any decisions about Filene's marketing operations would be considered by the new owner.