Another Airline Bankrupt

By: TraderMark Friday, April 11, 2008 12:17 PM

Symbols: APOL, FRNT, SHRP

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Bankruptcy Court for the Southern District of New York.

Linens 'n Things Inc., a home-furnishings retailer caught by an increasing debt load and shrinking housing market, is expected to file for Chapter 11 bankruptcy-court protection by Tuesday, several people familiar with the matter said.
A Linens 'n Things filing would mark one of the first major retailers to seek bankruptcy protection in this economic downturn. The New Jersey retailer, which sells home products like towels, bath rugs and kitchen appliances, has about 590 stores in 46 states and employs 17,000 people.
Linens would be one of the largest buyouts to go bust since the credit crisis took hold last summer. In February 2006, Apollo Management LP acquired Linens for $1.3 billion. The housing crisis made the home-furnishings space ultracompetitive, and the debt on the company's balance sheet gave it diminished flexibility to ride out the downturn. (I wonder if the bonds for the leveraged buyouts are part of that package Lehman packaged to the Federal Reserve?) :)
In a recent letter to investors, Apollo founder Leon Black acknowledged that the company was troubled, explaining that while it had made operational improvements, its financial results "remain challenged." Apollo filed to go public in a share offering this week. (isn't that ironic??)
Linens also is working to avoid or delay filing for bankruptcy protection by meeting Monday with its lenders and largest vendors to work out an agreement, but a deal is unlikely.
"This is probably the first major shoe to drop in this retail sector, and we aren't at the bottom," said Mohsin Y. Meghji, principal of Loughlin Meghji + Co., a bankruptcy and restructuring advisory firm.

I see Mr Meghji does not work on Wall Street or else he's realize this IS the bottom; this is not a problem; and everything will be fine "in 6 months". Did he not drink his Kool Aid today?

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