bankruptcy filing

Meanwhile, the company is closing stores in eight states over the next few weeks, bringing the chain's store count to 79, down from 121 at the time of its bankruptcy filing. The move marks the exit of the Connecticut and Philadelphia markets for the retailer, as it aims to focus on the California and New York City metropolitan area, Prentice executives say. Investment firm Great American Group will handle the liquidation.

After the closing of the deal Levitz will enter into a new $55-million credit facility with GE Commercial Finance; Prentice will also invest another $50 million into the retailer. When it filed for Chapter 11, Levitz executives asked the US Bankruptcy Court in the Southern District of New York to approve a $90-million debtor-in-possession credit facility by GE, which was to include an incremental credit facility of $25 million arranged by Prentice.

This is not Prentice's first retail acquisition. The New York City-based firm is in a $9.60-per-share, joint-venture deal to acquire Knoxville, TN-based Goody's Family Clothing. In May it bought stakes in then-bankrupt retailer KB Toys.