Eddie Bauer files for Chapter 11 Bankruptcy protection

Eddie Bauer, the U.S clothing giant, has filed for Chapter 11 Bankruptcy protection and announced it wants to sell itself for $202 million to CCMP Capital, which is a private equity firm.

Eddie Bauer filed for protection in Delaware, and companies such as Bank of America, General Electric and the CIT Group have all offered to provide the company with $100 million in financing. It wants to sell to CCMP through what is called a 363 sale process, where a judge would need to approve the sale and other bidders could compete to buy the company. CCMP would be allowed a $5 million breakup fee if it loses the bid during the auction process however.

Eddie Bauer has about 371 stores across North America but has been suffering from the bad economy for some time now. They were trying to cost cut and change the management and merchandise, but it is too late.

For the last three months, the losses have increased from $25.2 million to $44.5 million or $1.44 a share. They also had $427 million in debt payments.
The company blamed much of the debt to Spiegel, its parent company that filed for bankfuptcy in 2003. They acquired $300 million in debt when this happened.