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Discount Retailer Loehmann's Files for Chapter 11

Loehmann's Holdings, a Bronx, N.Y.-based discounter of designer goods, has filed for Chapter 11 bankruptcy. The retailer plans to reduce its debt by $115 million in a pre-arranged deal with current owner Istithmar, a unit of Dubai World, and Whippoorwill

Loehmann's Holdings, a Bronx, N.Y.-based discounter of designer goods, has filed for Chapter 11 bankruptcy. The retailer plans to reduce its debt by $115 million in a pre-arranged deal with current owner Istithmar, a unit of Dubai World, and Whippoorwill Associates.

Istithmar and Whippoorwill plan to invest $25 million when Loehmann's exits Chapter 11. The retailer's bankruptcy petition listed having between $100 million and $500 million in assets and debts. Loehmann's will transfer 51 percent of its new equity to its creditors and retain its 49.1 percent of the company with Istithmar and Whippoorwill.

Loehmann's operates 45-plus stores in 12 states, offering discounts on designer brands such as Diane Von Furstenberg and Michael Kors. Earlier this month, the retailer said it would close up to 15 stores.

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