Capital Markets

Eddie Bauer Again a Going Concern

Retailer refinanced earlier this month after a buyout fell through in February.
Stephen TaubApril 18, 2007

Finally, some good news for Eddie Bauer Holdings.

In a regulatory filing, the struggling retailer announced that its independent auditor has removed its “going concern” opinion. Auditors typically issue the warning when they doubt a company can continue to operate for more than a year after the financial statement date—in this case, last December 30.

Eddie Bauer refinanced its debt on April 4, and on Tuesday the company filed amended financials for last year, without the auditor warning.

An earlier bailout floundered in February, when shareholders rejected a proposed $286 million acquisition by Sun Capital Partners and Golden Gate Capital. The firms had also agreed to assume $328 million of the troubled retailer’s debt.

The deal had been approved by regulators, recommended by directors, and endorsed by proxy advisory firms Institutional Shareholder Services and Glass Lewis, according to the Associated Press at the time.

A day after the acquisition fell through, Fabian Månsson resigned as president and CEO.

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