SAN JOSE, Calif. (AP) -- Orchard Supply Hardware Stores said Tuesday that it has received bankruptcy court approval for the hardware and garden store retailer to access $177 million in debtor-in-possession financing.
The company, based in San Jose, Calif., is a Sears spinoff that filed for bankruptcy in June. Debtor-in-possession financing is a type of financing arranged for a company while under Chapter 11 bankruptcy protection.
In late June, home improvement chain Lowe's Companies Inc. made a $205 million bid for the company, plus the assumption of payables owed to nearly all of Orchard's supplier partners. It is the first "stalking horse" bid for an offer of Orchard's assets. The court set a deadline of Aug. 9 for any competing bids.
Under the terms of the agreement with Lowe's, Orchard will operate as a separate, stand-alone business at the completion of the sale process, retaining its brand, management team and associates.
Orchard said that the U.S. Bankruptcy Court for the District of Delaware gave final approval for Orchard to access $177 million in debtor in-possession financing provided by its existing lender, Wells Fargo Bank.
The company said that this financing, along with its ongoing cash flow, will ensure that Orchard is able to continue meeting its financial obligations throughout the Chapter 11 case.
Orchard, as of the end of June, has 89 stores in California and two stores in Oregon.