CAMPEAU: THE ROAD TO CHAPTER 11
1986
December: Campeau acquires Allied Stores for $3.4 billion.
1987
April-August: Various Allied units are sold off, including Joske’s, Bonwit Teller, Garfinckel’s and Catherine’s.
1988
January: Campeau bids $4.2 billion for Federated Department Stores.
April: After battling rival suitor R. H. Macy & Co., Campeau acquires Federated for $6.7 billion. Allied sells Brooks Bros. to Mark & Spenser for $750 million.
April-November: The sale of retailing units continues: Allied sells Brooks Bros., Ann Taylor; Federated sells I. Magnin, Bullock’s and Bullocks Wilshire, Foley’s and Filene’s.
November: Troubles emerge when investment bankers have to scale back a $1.15-billion offering of Federated junk bonds.
1989
January: Campeau misses a deadline for paying off a $1.1-billion bridge loan and is forced to cede greater authority to investment bankers First Boston, Paine Webber and Dillon, Read & Co.
August: Federated and Allied run out of cash.
Sept. 8: Campeau announces a restructuring that puts its crown jewel, Bloomingdale’s, on the block.
Sept. 13: Federated and Allied disclose that their projected cash needs will exceed their working capital and that Allied will not be able to pay interest due that week on its junk bonds. The next day, the two retail divisions’ junk bonds plummet.
Sept. 19: Campeau is rescued by a $250-million loan from Olympia & York Developments, but Robert Campeau is required to cede managerial control.
Dec. 12: Allied and Federated warn in an SEC filing that they might have to file for protection from creditors if lenders don’t reschedule their debt.
Dec. 14-15: Apparel makers are informed that they can no longer get financing for shipments to Campeau-owned stores. The junk bond market falls.
Dec. 21: A banking syndicate sends a default notice to Campeau and warns that it could demand early repayment of $2.34 billion in loans to Federated and Allied unless the department store chains demonstrate their solvency by Dec. 31.
1990
Jan. 2: Campeau wins more time to work out a new agreement with the Federated and Allied bankers. In exchange for having the Dec. 31 deadline extended to Jan. 15, Federated agrees to early repayment of a $250-million loan, while Allied agrees to talk over a restructuring plan with its lenders by Jan. 11.
Jan. 4: National Bank of Canada seizes about half of Robert Campeau’s voting shares in Campeau Corp. after his personal holding companies default on loans against which the shares were pledged.
Jan. 9: National Bank of Canada names two members to Campeau’s expanded board of 12 directors.
Jan. 11: Campeau’s board strips Robert Campeau of authority over retailing divisions. The U.S. stores are placed in a trust isolated from the rest of Campeau.
Jan. 15: Allied and Federated seek protection under Chapter 11 of the U.S. Bankruptcy Code.
