Careismatic Brands has filed for Chapter 11 at the US Bankruptcy Court for the District of New Jersey as it aims to eliminate its $833 million debt and reduce its interest expense burden.

In conjunction, the medical apparel and footwear retailer secured a $125 million financing from its first lien lenders to help continue its operations during the process.

“With a significantly stronger financial foundation, we will be better positioned to advance our leadership in the healthcare apparel industry as we serve the community of care well into the future,” said Careismatic Brands CEO Sid Lakhani.

“We remain laser-focused on leveraging our expansive portfolio of market-leading brands, unmatched scale, and global infrastructure to continue delivering best-in-class services and products to our customers.”

The company said it intends to operate without disruption during the process, including continuous payment of employee wages and benefits, maintaining customer programs, and delivering obligations to vendors.

In addition, the company entered into a restructuring support agreement (RSA) with its equity sponsor and an ad hoc group representing about 76 per cent of its first lien lenders and 70 per cent of its second lien lenders.

The RSA contemplates effectuation of the substantial deleveraging either through a full equitization of the company’s first lien debt or an alternative value-maximizing plan.

The RSA includes a 120-day milestone for the court to confirm a Chapter 11 plan.