Eddie Bauer Holdings Inc. has sold $898 million of overdue credit-card loans left over from the 2003 bankruptcy of Spiegel Inc.
The Bellevue, Wash., outdoor clothing retailer said it sold the loans for $113.9 million, with 90% of the proceeds going to a trust set up for unsecured Spiegel creditors. Spiegel spent two years under court protection before emerging from bankruptcy as Eddie Bauer in 2005.
Most of the loans are overdue, Eddie Bauer said in a regulatory filing Tuesday. The retailer put the loans up for auction earlier this year and sold them to three firms on Dec. 4 and 5, chief financial officer Marvin Toland said in an interview.
In June 2005, when Eddie Bauer emerged from bankruptcy, the company agreed to pay 90% of any interest and principal it collected on the credit cards to the Spiegel Creditor Trust.
Eddie Bauer kept about $11 million of the proceeds from this month's loan sale.