Delta Apparel Seeks Bankruptcy Protection, Restructures with Major Asset Sale
Portfolio Pulse from Benzinga Newsdesk
Delta Apparel, Inc. and its subsidiaries, including Salt Life Beverage, LLC, have filed for Chapter 11 bankruptcy protection. They plan to continue operations as debtors-in-possession and seek approval for a senior secured super-priority debtor-in-possession financing arrangement with Wells Fargo and other lenders. Additionally, Delta Apparel has entered into an Asset Purchase Agreement with FCM Saltwater Holdings, Inc. to sell certain assets related to Salt Life for approximately $28.03 million. The transaction is subject to Bankruptcy Court approval and competitive bidding. Key resignations include Vice President Nancy P. Bubanich and directors Glenda E. Hood and Sonya E. Medina.
July 01, 2024 | 11:25 am
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NEUTRAL IMPACT
Wells Fargo is involved in providing senior secured super-priority debtor-in-possession financing to Delta Apparel during its Chapter 11 bankruptcy proceedings. This involvement indicates Wells Fargo's role in supporting Delta Apparel's operations during the restructuring process.
Wells Fargo's involvement in providing DIP financing to Delta Apparel is a routine banking operation and is unlikely to have a significant impact on its stock price. The relevance and importance are moderate as it shows Wells Fargo's role in supporting a distressed company.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
Delta Apparel has filed for Chapter 11 bankruptcy and plans to sell certain assets to FCM Saltwater Holdings for $28.03 million. The company is seeking DIP financing with Wells Fargo to continue operations during the bankruptcy process. Key resignations include VP Nancy Bubanich and directors Glenda Hood and Sonya Medina.
The Chapter 11 filing indicates significant financial distress, which is likely to negatively impact the stock price in the short term. The planned asset sale and DIP financing are efforts to stabilize operations, but the overall sentiment remains negative due to the bankruptcy proceedings and key executive resignations.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100