Alco Files For Chapter 11 Bankruptcy - Update

(RTTNews) - Discount retailer Alco Stores Inc (ALCS) said it has filed for protection from creditors under Chapter 11 bankruptcy on Sunday, with plans to liquidate or sell its assets.

The 113-year-old retailer said the company and its subsidiary, Alco Holdings Ltd Liability Co, filed voluntary petitions for relief in the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division.

Alco, based in Coppell, Texas, cited problems such as the tough economic conditions and stiff competition, and said it hoped to sell profitable stores and liquidate the rest. Alco operates 198 stores and has 3,000 employees.

According to Alco, debtors expect to continue to operate their businesses as "debtors-in-possession" under the jurisdiction of the Bankruptcy Court.

The company said the agent and lenders in its debtor-in-possession credit agreement have agreed to provide a senior secured revolving credit facility in an aggregate principal amount not to exceed $110 million and a senior secured term loan in the original principal amount of about $12.68 million.

Alco shares plunged about 70 percent to $0.48 in morning trade on the Nasdaq.

Alco has lined up a stalking-horse liquidation bid from a joint venture made up of Tiger Capital Group, LLC, SB Capital Group, LLC, and Great American Group WF, LLC.

As of July 2014, Alco reported assets of about $222 million and debts of about $162 million.

ALCS is trading $0.48, down $1.17 or 70.70%, on a volume of 0.68 million shares on the Nasdaq.