Archibald Candy Corp is expected to file for Chapter 11 bankruptcy protection today [Wednesday].
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The Chicago-based company is reported to have lined up some US$45m in debtor-in-possession financing from Foothill Capital Corp. and Cerberus Capital Management LP to fund its operations while it reorganises its balance sheet.
For some years, Archibald, which is the parent company of Fannie May and Fanny Farmer candy stores, has been weighed down by a significant debt burden and poor results from its Sweet Factory candy chain.
Sweet Factory itself filed for Chapter 11 bankruptcy protection last November. When Archibald failed to make a key preferred stock payment in February, speculation mounted that the parent company would follow suit.
A forbearance agreement that expired 31 May committed Archibald’s creditors and preferred shareholders not to demand payment from the company.
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By GlobalDataArchibald employs more than 5,000 people and operates 657 stores. The company does not expect to have to close many stores during the restructuring following Chapter 11 bankruptcy protection.
