1st financial branch in the United States of America, Lendmark Financial Services, has said that it will not pay out $400 million in debt on the $500 million loan the retailer took out last year.
Lendmark said in a statement that it had made the decision after reviewing the company’s debt management plan and evaluating other sources of financing, including private equity.
“The debt is part of a comprehensive asset management program that Lendmarks debt management team has put into place,” the statement said.
In a statement, Lendermark said it was not able to immediately respond to Reuters’ request for comment.
Last year, Lendingmark, one of the largest retail banks in the world, said it had taken on $250 million in loans for the purchase of about 50% of its U.S. businesses, but that the loan payments were not due until the end of 2017.
The loan was approved by a federal judge in November 2016.
“In the case of the Toys ‘N’Mores, we did not expect to see a payment until March 2019, which would result in a $500m payment to the lender on April 15, 2019,” Lenderman said.
“We are very concerned about how the loan will be used.
Lendermen’s stated position is that we are not expected to repay the loan until March or April 2019, so we will not have any further repayment obligation until March 2021.”
This loan is a direct result of Lendermans acquisition of the American Retailers Association (ARAA) and our ongoing efforts to build the company into a larger and better retailer,” Lendman added.
The deal with Toys ‘n’ Mores ended on September 25, 2020, when the retailer said it would sell the business to a consortium led by the Chicago-based retailer and the privately held private equity firm Cerberus Capital Management.
According to a company filing with the Securities and Exchange Commission, LENDmark has paid out $2.3 billion in the deal.
A spokesperson for Lendermarks parent company, Lenders Financial Services Inc., did not immediately respond when asked about Lender Markets’ decision to not pay the debt.
‘It was a bad deal’ Reuters’ Andrew Miller, a spokesman for Toys ‘L’O’Neil Stores Inc., said in an email that the company was “disappointed” by the decision to sell the U.A.E. company.
Toyota has said it is still evaluating LenderMark and LenderMasters plans for the debt, and the retailer did not respond to a request for further comment.”
Toyota is evaluating the loan agreements with LenderMs, Lends and LendMs.com and the companies are not ready to make any final decisions at this time.”