Lamonts Files Reorganization Plan If Plan Is Approved, Retailer Will Emerge From Bankruptcy

Lamonts Apparel has filed a reorganization plan with the U.S. Bankruptcy Court to emerge from Chapter 11.

Under the proposed plan, secured claims would be paid in full. Unsecured claims, estimated to total about $90 million, would be satisfied by the issuance of new common stock of the reorganized company and warrants to purchase additional stock in certain circumstances.

A bankruptcy court hearing on the plan is set for Oct. 24 in Seattle.

Spokane developers applauded the company’s progress in emerging from bankruptcy.

Lamonts has three stores in Spokane - at Shadle Center on the city’s north side, at University City Shopping Center in the Valley and in Manito Shopping Center on the South Hill - and one in Coeur d’Alene at Silver Lake Mall.

The company closed its downtown Spokane store last year.

“If the question is ‘Is it better to have Lamonts out of bankruptcy?’ the answer is absolutely,” said David Peterson, vice president of Goodale and Barbieri, property managers of U-City.

If the company emerges from bankruptcy, Peterson said, “they will have the flexibility to operate their stores any way they want to operate them.”

Rex Frazier, president of JP Realty, Inc., which manages Silver Lake Mall, said companies in bankruptcy usually don’t offer the diversity of merchandise that healthier competitors do.

If Lamonts emerges from bankruptcy, Frazier said, “They can compete as aggressively as their competitors.”

Lamonts filed for Chapter 11 bankruptcy protection on Jan. 6. Since then, it has closed nine unprofitable stores and now operates 42 clothing stores in Alaska, Idaho, Montana, Oregon, Utah and Washington.

The company also has cut operating costs by more than $10 million and secured a new financing arrangement with The First National Bank of Boston.

“These and other improvements in our business have positioned Lamonts to emerge from Chapter 11 and to operate successfully in the future,” said Alan Schlesinger, chairman and chief executive officer.

The reorganization plan is supported by committees representing the company’s trade creditors, bondholders and shareholders, he said.

, DataTimes