Eddie Bauer gets bankruptcy court OK to borrow $100M

Eddie Bauer Holdings, the bankrupt U.S. outdoor-clothing chain, won court permission to borrow $100 million to help finance operations while it sells itself at an auction.

U.S. Bankruptcy Judge Mary Walrath said Tuesday during a hearing in Wilmington, Del., that she would approve the loan after the company submitted changes to court documents related to the financing.

"With the court's rulings, we continue on track to conduct business as usual as we proceed with our sale process," Neil Fiske, Eddie Bauer's president and chief executive officer, said in a statement.

Eddie Bauer, based in Bellevue, filed for bankruptcy protection last month with plans to sell itself within 60 days at an auction. Affiliates of CCMP Capital Advisors agreed to make the initial $202 million bid at an auction scheduled for July 16.

The loan is being made by the company's existing lenders: Bank of America, GE Capital and CIT Group/Business Credit. The money, along with cash being held as collateral for its lenders, will be used to pay employees, suppliers and other key creditors, the company said.

The company's 371 stores in the U.S. and Canada are open while it sells itself.