UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 

 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 

 
Date of Report (Date of earliest event reported): January 15, 2018
 
THE BON-TON STORES, INC.
(Exact name of registrant as specified in its charter)
 
Pennsylvania
 
 
0-19517
 
 
23-2835229
(State or Other Jurisdiction of Incorporation) 
 
 
(Commission File Number)
 
 
(IRS Employer Identification No.)
   
2801 E. Market Street, York, Pennsylvania 17402
(Address of Principal Executive Offices)
 
717-757-7660
(Registrant’s Telephone Number, including Area Code)
 
Not Applicable
(Former Name or Former Address, If Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
                                    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
 



Item 1.01               Entry into a Material Definitive Agreement.

On January 15, 2018, the Bon-Ton Stores, Inc. (the “Company”), The Bon-Ton Department Stores, Inc., a wholly owned subsidiary of the Company (the “Issuer”), and the subsidiary guarantors under the Issuer’s 8.00% Second Lien Senior Secured Notes due 2021 (the “Notes”) entered into a Forbearance Agreement (the “Second Lien Forbearance Agreement”) with an ad hoc group of holders of approximately 75% in aggregate principal amount of the outstanding Notes (the “Forbearing Holders”).  Pursuant to the Second Lien Forbearance Agreement, the Forbearing Holders have agreed, until January 26, 2018, to forbear from taking any action to accelerate the Notes and from enforcing or exercising (or directing the trustee to exercise) any rights or remedies under the Indenture with respect to the Issuer’s failure to pay interest on the Notes in the amount of $14 million on December 15, 2017 (the “Specified Default”).  The Second Lien Forbearance Agreement is subject to customary terms and conditions.  The forbearance period under the Second Lien Forbearance Agreement may be extended with the consent of the parties.
 
On January 16, 2018, the Company, the Issuer, and the other obligors under the Second Amended and Restated Loan and Security Agreement, dated as of March 21, 2011 (the “Loan and Security Agreement”), entered into a Forbearance Agreement (the “Loan Forbearance Agreement”) with the lenders thereunder, Bank of America, N.A., as agent, and Bank of America and Wells Fargo Bank, National Association, as co-collateral agents (collectively, the “Lender Parties”).  Pursuant to the Loan Forbearance Agreement, the Lender Parties have agreed, until January 26, 2018, to forbear from taking any action to enforce or exercise any rights and remedies under the Loan and Security Agreement with respect to the Specified Default.  The Loan Forbearance Agreement is subject to customary terms and conditions.  The forbearance period under the Loan Forbearance Agreement will be automatically extended to February 4, 2018 if the forbearance period under the Second Lien Forbearance Agreement is extended to such date, and may be further extended with the consent of the parties.

The press release announcing the forbearance agreements is attached hereto as Exhibit 99.1.

Item 9.01                Financial Statements and Exhibits.
 
(d) Exhibits
 
Exhibit
Number
 
 
Description of Exhibit
99.1
 
 
 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
  The Bon-Ton Stores, Inc.  
       
 
By:
/s/ Michael G. Culhane  
   
Michael G. Culhane
 
   
Executive Vice President – Chief Financial Officer 
 
       
 
Dated: January 16, 2018
 
 
 
 


EXHIBIT 99.1
 
 

The Bon-Ton Stores, Inc. Enters Into Forbearance Agreements

MILWAUKEE, WI (January 16, 2018) –The Bon-Ton Stores, Inc. (OTCQX: BONT) (“the Company”), today announced that it has entered into forbearance agreements (the “Forbearance Agreements”) with its ABL Credit Agreement lenders and an ad hoc group of holders of approximately 75% in aggregate principal amount of the Company’s 8.0% Second Lien Secured Notes due 2021 (the “2L Notes”).
Under the terms of the Forbearance Agreements, the ABL Credit Agreement lenders and the forbearing holders of the 2L Notes have agreed to forbear from exercising any and all remedies available to them as a result of the Company not making the interest payment due on the Notes on December 15, 2017, subject to customary terms and conditions. The Forbearance Agreements will expire on January 26, 2018, unless further extended by the parties.  The forbearance period under the ABL forbearance agreement will be automatically extended to February 4, 2018 if the forbearing holders of the 2L Notes agree to extend to such date.
As previously disclosed, the Company is engaged in ongoing discussions with its debt holders in an effort to strengthen its capital structure to support the business.
Additional information on the Forbearance Agreements is contained in a report on Form 8-K, which will be filed with the Securities and Exchange Commission.
About The Bon-Ton Stores, Inc.
The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 260 stores, which includes nine furniture galleries and four clearance centers, in 24 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.  The stores offer a broad assortment of national and

private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings.  The Bon-Ton Stores, Inc. is an active and positive participant in the communities it serves.  For further information, please visit http://investors.bonton.com.
Cautionary Note Regarding Forward-Looking Statements
Certain information included in this press release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which may be identified by words such as “may,” “could,” “will,” “plan,” “expect,” “anticipate,” “believe,” “estimate,” “project,” “intend” or other similar expressions and include the Company’s fiscal 2017 guidance, involve important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. Factors that could cause such differences include, but are not limited to: risks related to retail businesses generally; a significant and prolonged deterioration of general economic conditions which could negatively impact the Company in a number of ways, including the potential write-down of the current valuation of intangible assets and deferred taxes; risks related to the Company’s proprietary credit card program; potential increases in pension obligations; consumer spending patterns, debt levels, and the availability and cost of consumer credit; additional competition from existing and new competitors or changes in the competitive environment; inflation; deflation; changes in the costs of fuel and other energy and transportation costs; weather conditions that could negatively impact sales; uncertainties associated with expanding or remodeling existing stores; the ability to attract and retain qualified management; the dependence upon relationships with vendors and their factors; a data security breach or system failure; the ability to reduce or control SG&A expenses, including initiatives to reduce expenses and improve profits; operational disruptions; unsuccessful marketing initiatives; the ability to expand our capacity and improve efficiency through our new eCommerce fulfillment center; changes in, or the failure to successfully implement, our key strategies, including the store rationalization program and initiatives to improve our merchandising, marketing and operations; adverse outcomes in litigation; the incurrence of unplanned capital expenditures; the ability to obtain financing for working capital, capital expenditures and general corporate purposes; the impact of regulatory requirements including the Health Care Reform Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act; the inability or limitations on the Company’s ability to favorably adjust the valuation allowance on deferred tax assets; the ability of the Company to change its capital structure; and the financial condition of mall operators. Any sales results reported herein do not necessarily predict the company’s performance for the full 2017

holiday season or for the fiscal fourth quarter as a whole. Additional factors that could cause the Company’s actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1A of the Company’s Form 10-K filed with the Securities and Exchange Commission.
 
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MEDIA CONTACT:
Christine Hojnacki, 414-347-5329
christine.hojnacki@bonton.com