(October 16, 2000) In a development with potentially positive LB taxpayer implications, Loehmann's Inc. has formally emerged from Chapter 11 bankruptcy protection.
The LB Loehmann's store in the Marina Pacifica shopping center was the center of a controversial 1997 City Council vote that potentially exposed LB taxpayers to pay up to $1.3 million to Marina Pacifica (Loehmann's LB landlord) if the LB Loehmann's store were to close due to bankruptcy. Loehmann's corporate emergence from bankruptcy would seem to reduce the risk of that contingency. The Loehmann's store has remained open throughout the Chapter 11 proceedings.
The LB City Council voted at its September 19, 2000 meeting to pay Marina Pacifica potentially $50,000 a year in annual sales tax revenue for two years in exchange for removing another controversial 1997 provision (like the bankruptcy provision, part of LB's "retail sales tax incentive program") under which LB taxpayers would pay Marina Pacifica up to $1.3 million if Loehmann's LB store terminated its lease for failure to meet certain sales targets.
Loehmann's, Inc.'s reorganization plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on September 6, 2000 and now becomes effective immediately. A media spokesperson for the firm, contacted by LBReport.com in New York, indicated there were no references to further store closings in these documents.
In a press release, Loehmann's Chairman and CEO Robert N. Friedman commented, "While a difficult process, this reorganization has enabled us to effectively move past a number of challenges and establish a strong foundation for solid performance and growth going forward. Looking ahead, we believe Loehmann's is positioned to be a stronger, more competitive company, and we are very excited about the future of our business."
Loehmann's, Inc. is a specialty retailer of designer and brand name women's and men's fashion apparel, accessories and shoes at prices the firm says "are typically 30% to 65% below department store prices." Loehmann's currently operates 44 stores in 17 states.