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Iraq invades Kuwait, oil to $40 hits spending
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Federated Department Stores and Allied Stores, owned by Toronto-based Campeau Corp., filed for Chapter 11 bankruptcy due to a cash-flow crisis stemming from $7 billion in debt from leveraged buyouts. The filing allows the retailers, which operate major chains like Bloomingdale's, to continue operations while restructuring with $700 million in debtor-in-possession financing. The move impacts suppliers and raises questions about pre-filing payments, but aims to stabilize the business and preserve assets amid ongoing retail turmoil.
Southland Corp, operator of 7-Eleven, is pursuing a prepackaged Chapter 11 bankruptcy to restructure $1.8 billion in debt after securing creditor and Japanese partner approvals. The move allows it to lower the required bondholder approval threshold, facilitating a deal where Japanese partners Ito-Yokado and Seven-Eleven Japan will gain 70% ownership via a $430 million infusion. This restructuring strengthens Southland’s position despite insufficient bond tender, avoiding liquidation and reshaping capital structure.