Payless board authorizes DIP financing

After planning closure of all of its 2,100 U.S. stores, Payless ShoeSource will seek court approval for up to 25 million dollars in debtor-in-possession financing. The retailer's Board of Directors authorized this decision on Friday.

The DIP financing request was submitted to the U.S. Bankruptcy Court in Missouri and will be reviewed early next week. If approved, financing will be provided by some of Payless' existing lenders.

Payless' Chief Restructuring Officer Stephen Marotta said in a statement, “After reviewing multiple proposals, we have chosen a financing plan that will enhance our ability to serve our customers and support suppliers worldwide."

Marotta said that if the DIP financing is approved, funds will be used to finance the cost of goods, shipping and freight to help the retailer's current liquidation sales.