Wattles is chairman & CEO of Hollywood EntertainmentCorp.
The move came as no surprise to industry experts sincethe electronics retailer reported earlier this weekthat same-store sales in December plunged 18%, whileoverall sales totaled $85.7 million, an 18% declinefrom the year before. Moreover, Ultimate Electronicshas more than $80 million in debt and substantialleases on large stores over the next decade.
As part of the reorganization, Ultimate Electronicshas received $113 million debtor-in-possessionfinancing from Wells Fargo Retail Finance and $5.6million from Mark Wattles Enterprises LLC, whichpurchased 6.85 million shares of the retailer's commonstock for $4.4 million and established a two-yearoption agreement to purchase 1.85 million shares ofcommon stock for $1.2 million.
The stock purchase agreement with Wattles requiresthat all of the retailer's directors including thefounder and chairman of the board, William Pearse.
Wattles will work with the U.S. Bankruptcy Court forthe District of Delaware to formulate therestructuring plan. Ultimate Electronics says thatduring the restructuring process, vendors, suppliersand other business partners will be paid under normalterms for goods and services provided during thereorganization.
The post-petition financing, which is subject toBankruptcy Court approval, is expected to provide theCompany with funding to support its post-petitiontrade and employee obligations, as well as thecompany's ongoing operating needs during therestructuring process.
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