Eddie Bauer (EBHI) Confirms Chapter 11 Bankruptcy; Enters Into Bid Agreement with Private Equity Firm That Plans to Continue Operations

June 17, 2009 2:32 PM EDT

Eddie Bauer Holdings, Inc. (Nasdaq: EBHI) today announced that it has voluntarily initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Delaware and under the Companies' Creditors Arrangement Act in Canada in the Ontario Superior Court of Justice (Commercial List), and is pursuing a sale process under Section 363 of the Bankruptcy Code and under the CCAA.

The Company has entered into an asset purchase agreement with an affiliate of CCMP Capital Advisors, LLC to buy the Company's assets through a bankruptcy process, subject to an auction and Bankruptcy Court approval, for $202 million in cash, with working capital and similar adjustments. CCMP Capital, a global private equity firm with significant experience in the retail and consumer sectors, intends to operate the business as a going concern with little or no long-term debt. CCMP Capital has agreed to:

• Keep the majority of the stores open and retain the majority of the employees;
  
• Support Company motions to maintain critical vendor relationships and payments; and
  
• Support Company motions to honor gift cards and the Company's loyalty reward program.

The sale process is expected to enable a sale of the business to CCMP Capital or any higher and better bidder approved by the Court on an accelerated basis, thereby transforming the business into a financially stronger entity with substantially less debt and a better position for the future. The Company currently anticipates completing the sale process in 60 days or less.

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• CCMP Capital
• Bankruptcy

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