Loehmann's Receives Court Approval for Disclosure Statement Detailing its Restructuring Plan

NEW YORK, Jan. 5, 2011 /PRNewswire/ -- Loehmann's Capital Corp. and its affiliates ("Loehmann's" or the "Company") announced today that they have secured Court approval for their Disclosure Statement for the Joint Plan of Reorganization that will substantially reduce the Company's debt and recapitalize its balance sheet, paving the way for an expedited and successful chapter 11 exit in February 2011.

The Court's approval allows the Company to proceed with seeking creditor votes on the Plan, and follows the agreement reached on December 15, 2010 with the official committee of unsecured creditors to proceed with the restructuring plan.

Currently, holders of approximately 72% of the principal amount of the Class A Notes and 64% of the principal amount of the Class B Notes have executed the Restructuring Support Agreement.  The Company had previously reached an agreement with Whippoorwill Associates, Inc., as agent for its discretionary funds and accounts, which represents approximately 70% of its senior secured notes, and its existing shareholder, Istithmar World, to support and backstop the Plan.

Voting on the acceptance of the Plan by eligible creditors will close on February 2, 2011 at 12:00 p.m.  A Court hearing to approve the Plan has also been scheduled for February 7, 2011.

As part of the Joint Plan of Reorganization, the Company will receive a $25 million capital infusion upon emergence from chapter 11 through a rights offering to the Company's senior secured Class A Noteholders, which is being backstopped by Istithmar World and Whippoorwill Associates, Inc.  Under the terms of the global settlement agreement between the parties, general unsecured creditors will receive a pro rata distribution consisting of cash in the aggregate amount of $2 million.

Daily operations at Loehmann's continue without interruption and are currently funded via a $33 million revolving credit facility with Crystal Financial LLC and an additional $7 million junior facility by Whippoorwill.

About Loehmann's

Founded in 1921 as the "Original Designer Outlet," Loehmann's is a leading national specialty retailer, offering well-known designer and brand name women's fashion apparel, accessories and shoes, and men's and children's apparel and furnishings at prices that are typically 30% to 65% below department store prices.  It currently owns 46 stores with locations in 12 states and DC.

For more information, please visit www.loehmanns.com.

SOURCE Loehmann's Capital Corp.