WILMINGTON, Del. – Bankruptcy documents filed Wednesday afternoon by The Mitchell Gold Co. tell a story of a company trying to keep the doors open while having a dispute over funding with its lender.
After the Aug. 25 shutdown, company officials were discussing temporary store closings – not an immediate permanent shutdown – and employee layoffs that would have allowed for an “orderly liquidation” of inventory.
In the Chapter 11 petition filed here with the U.S. Bankruptcy Court of Delaware, The Mitchell Gold Co., which currently operated under the Mitchell Gold + Bob Williams brand, said it stopped taking customer deposits at all 25 store locations and online the morning of Aug. 25. That’s the same day workers were notified the company was closing via a sign posted at the company’s Taylorsville, N.C., factory.
The documents say when Mitchell Gold + Bob Williams’ lender PNC Bank, National Association denied funding, store managers were told to no longer accept customer deposits or payments unless purchases could be carried out of the store by the customer.
Based on conversations with its lender, the company’s board said it believed employee wages and compensation had been secured from PNC, and that information was shared with the 533 employees. However, the funds were rejected Sept. 1, the same day, the company said, PNC “accelerated all obligations.” The company also said PNC refused to commit to fund operations “as a going concern or for an orderly sale or liquidation” despite repeated requests up until the closure.
According to the bankruptcy filing, the company has a preliminary debtor in possession lined up, but the document doesn’t specify where the financing could come from. The company also indicated that it had “received multiple third-party expressions and indications of interest for groups of assets and individual assets …” that could pay off the debt owed to its senior lender.
In addition, in its resolution included in the filing, the company’s board of directors gave the go-ahead for the Chris Moye, interim CEO of Mitchell Gold + Bob Williams, to hire Riveron as a consultant, and to appoint Dalton Edgecomb, Riveron’s senior managing director, as chief restructuring officer. The board also approved the hiring of Charlotte-based Stump & Co. as consultants and financial advisors.