Donnkenny and its subsidiaries, which license the Nicole Miller and Pierre Cardin brands, have filed for Chapter 11 and entered into an asset purchase agreement with Pacific Alliance affiliate Donn K Acquisition.
The retailer has received a $60 million debtor-in-possession credit from CIT Group/Commercial Services and Wells Fargo Century, a specialty financial services company. Donnkenny's CEO Dan Levy said the DIP money will be used to run the interim business "To buy and ship, and do what companies do."
CIT Group and Wells Fargo were chosen because of previous relationships the banks had with the company. "We didn't feel we could get a better arrangement anywhere else," Levy said. CIT was providing the company with a $65 million facility, but last September Donnkenny fell out of compliance with its monthly financial covenants under the credit agreement. According to an 8-K, the company's entire cash and liquidity requirements for the operation of its business was provided through the credit agreement.
Levy would not comment on the proposed acquisition, but said there will be an upcoming court hearing. He does not expect any changes to the labels and stated, "We hope to continue to be able to produce under those labels." Tom Dowling at Wells Fargo declined comment and calls to CIT were not returned.