Spiegel Inc.'s reorganization plan has been approved by the U.S. Bankruptcy Court for the Southern District of New York.
The plan establishes Eddie Bauer Holdings Inc., Redmond, WA, as the new parent company of Eddie Bauer, which is Downers Grove, IL-based Spiegel's only remaining asset. The new owners will consist of Commerzbank AG and other unsecured creditors of Spiegel.
Eddie Bauer Inc. reported that the plan had been approved late Wednesday.
The plan allows Spiegel to exit Chapter 11 bankruptcy and begin paying creditors by June 17, according to published reports.
Also, reports have stated that, according to court papers, Eddie Bauer will close 34 furniture stores and eliminate about 700 jobs, or 8 percent of its workforce.
Once the company emerges from bankruptcy, Hamburg-based Otto GmbH, a former owner of Spiegel, will no longer own an interest in the company, according to reports.
Spiegel filed for bankruptcy in March 2003. The company sold its Spiegel and Newport News catalogs to Pangea Holdings Ltd. last year. After shopping around Eddie Bauer, Spiegel decided to keep the clothing chain after it said it hadn't received any adequate bids.
Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters