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Subsequent Events
12 Months Ended
Jan. 30, 2016
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

Filing of Voluntary Petitions under Chapter 11 of the Bankruptcy Code

On May 4, 2016 (the “Petition Date”), we and our subsidiaries (collectively, the “Debtors”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) and the filings therein (the “Chapter 11 Filings”). The Chapter 11 Filings constituted an event of default and automatic acceleration of our prepetition loans. The Chapter 11 cases have been consolidated for procedural purposes only and are being administered jointly under the caption “In re Aéropostale, Inc., et al.,” Case No. 16-11275.” During the pendency of the Chapter 11 cases, we will continue to operate our businesses as a “debtor in possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

DIP Financing

In connection with the Chapter 11 Filings, the Company entered into the DIP Facility, which provides for a loan with an aggregate principal amount of $160 million. On May 6, 2016, the Bankruptcy Court granted approval for us to draw $100 million in interim financing from the DIP Facility, which we intend to use for general purposes and also to pay off the Credit Facility (as defined below). The DIP Facility requires that we maintain minimum excess availability of at least (a) $25,000,000 during the month of May 2016 and (b) $13,000,000 at all times thereafter. In addition, the DIP Facility includes a covenant that requires us to limit expenditures to amounts provided in an agreed DIP budget, subject to certain permitted variances. Furthermore, the DIP Facility includes a series of milestones related to the Chapter 11 Cases. While these milestones allow us to simultaneously pursue both a plan of reorganization and a sale process, either path requires us to achieve a series of intermediate process benchmarks and, in any event, requires that a plan become effective or a sale be consummated, in either case, within 145 days after the Petition Date. Failure to comply with these covenants or milestones would result in an event of default under the DIP Facility and permit the lenders thereunder to accelerate the loans and otherwise exercise remedies under the loan documentation for the DIP Facility.

Supplier Dispute

In March 2016, we announced that the Company was engaged in a dispute with MGF Sourcing relating to the Sourcing Agreement. This caused a disruption in the supply of merchandise and resulted in both a liquidity constraint and lost sales. On May 11, 2016, the Company reached an agreement in principle with MGF Sourcing to resolve the dispute subject to approval of the Bankruptcy Court.

Supply Agreement Amendment

On April 19, 2016, we amended and restated the Supplier Agreement with one of our suppliers, which is referenced in Note 2 to the Notes to Consolidated Financial Statements. Under the agreement, we received an advance rebate payment as purchase discount equivalent to approximately $1.75 million per annum throughout the life of the sourcing agreement as a commitment of meeting certain minimum thresholds. Should we fail to meet the annual purchase minimum thresholds we would be required to make certain agreed upon shortfall payments. This amendment decreased the annual purchase commitment and removed the opportunity to receive an additional purchase discount.