Athlete's Foot files for Chapter 11

The Athlete's Foot Stores LLC, Kennesaw, Ga., filed a voluntary petition for Chapter 11 liquidation with the United States Bankruptcy Court of New York yesterday. Included with this filing is Delta Pace LLC, a subsidiary of the Athlete's Foot Stores LLC. The almost 600 independent franchise stores operating under franchise agreements with Athlete's Foot Brands Inc. and the trademarks are not included in this action. Additionally, the bonds issued from a 2003 securitization transaction from an unrelated entity (Athlete's Foot Brands Inc.) are not related to the Chapter 11 filing. President and CEO Robert J. Corliss recently said in a statement, "We are confident this is the right thing to do. Despite tremendous investments of money and time, many of our corporate stores have not been profitable resulting in a lack of liquidity which led to the company taking this action." The company's lender, GMAC, subject to certain conditions, has agreed to provide debtor-in-possession (DIP) financing to fund the liquidation process.