UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

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FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event

reported): October 5, 2012

Bakers Footwear Group, Inc.

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(Exact Name of Registrant as Specified in Charter)

Missouri

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(State or Other

Jurisdiction of

Incorporation)

000-50563

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(Commission

File Number)

43-0577980

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(I.R.S. Employer

Identification Number)

2815 Scott Avenue

St. Louis, Missouri

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(Address of Principal Executive Offices)

63103

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(Zip Code)

Registrant’s telephone number, including area code:

(314) 621-0699

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

The information set forth under Item 1.03 is incorporated herein by reference.

Item 1.03. Bankruptcy or Receivership.

As previously reported on its Current Report on Form 8-K dated October 3, 2012, Bakers Footwear Group, Inc. (the “Company”) filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code on October 3, 2012, in the United States Bankruptcy Court for the Eastern District of Missouri (the “Court”) as case no. 12-49658 (the “Case”). On October 4, 2012, the Company’s “first day” motions were approved by the Court. The Company will continue to operate its business as a “debtor-in-possession” under the jurisdiction of the Court and in accordance with the Bankruptcy Code and orders of the Court.

Summary of DIP Credit Agreement

On October 4, 2012, the Court approved, on an interim basis, the Senior Secured, Super Priority Debtor-In-Possession Credit Agreement (“DIP Credit Agreement”) between the Company and Crystal Financial LLC (“Crystal”). On October 5, 2012, the Company and Crystal entered into the DIP Credit Agreement. As previously disclosed, Crystal was also the Company’s lender under its June 13, 2012 credit agreement ("Existing Credit Agreement"). As of October 11, 2012, amounts outstanding under the DIP Credit Agreement are approximately $15.2 million, including $1 million on a post-petition basis. As previously described in its Current Report on Form 8-K filed on October 3, 2012, the DIP Credit Agreement provides for aggregate borrowings (the “DIP Loan”) of up to $22 million less the amounts outstanding under the Existing Credit Agreement. The amount the Company may borrow is limited by the interim order to $6 million on a post-petition basis, until the Court enters its final order in respect of the DIP Credit Agreement. The amount the Company may borrow is also limited based substantially on the Company’s credit card receivables, in-transit cash, eligible inventory and availability reserves, with an availability block equal to the greater of 7.5% of the borrowing base or $1 million (all as defined in the DIP Credit Agreement). There is also a carve-out for certain professional and administrative expenses. The DIP Credit Agreement also provides for a fully perfected first priority security interest in substantially all of the Company’s assets.

The Company will pay a closing fee of $1.5 million in two installments, with $1.2 million paid at closing and the remaining balance paid upon the Court’s entry of a final order approving the DIP Credit Agreement. The $900,000 early termination fee on the Existing Credit Agreement was applied as an offset to the closing fee. A commitment fee of 0.50% per year will be charged on the average unused portion of the DIP Loan. Additionally, an administrative fee of $5,000 per month will be paid on closing and on the first day of each calendar month thereafter. Interest will accrue at the LIBOR Rate (as defined in the DIP Credit Agreement) plus 8% (9% for certain obligations), with a default rate of an additional 2%.

The DIP Loan will be used to pay transaction fees and expenses, for the payment of any adequate protection payments approved in the DIP Orders (as defined in the DIP Credit Agreement), to finance working capital and general corporate purposes of the Company, and for the payment of expenses arising in the Company’s Case, as approved by the Court. Thereafter, upon entry of a final order, the DIP Loan will be used to refinance the obligations under the existing credit facility.

All obligations under the DIP Loan are due and payable in full on the termination date. The termination date means the earlier of (i) 30 days after closing, unless a final order approving the DIP Loan on a final basis has been entered prior to such date, (ii) six months following closing, (iii) the occurrence of an event of default, or (iv) the closing of a sale of all or substantially all of the assets of the Company in accordance with the Bankruptcy Code.

The DIP Credit Agreement contains customary representations and warranties, affirmative and negative covenants and other obligations, indemnities, events of default and remedies for credit facilities of this type, including financial covenants relating to the Company’s cash receipts, actual expenses, cash expenditures and a minimum availability covenant ranging between $1 million and $2.5 million.

The DIP Credit Agreement also requires the Company to meet certain deadlines in respect of its business restructuring plans, including its store closing plans, and its bankruptcy reorganization plan prior to specified dates, including entering into a definitive term sheet for a reorganization plan prior to November 2, 2012.

The foregoing description of the DIP Credit Agreement and related matters is qualified in its entirety by reference to the text of that agreement and filings and orders of the Bankruptcy Court.

The Company can give no assurance as to its ability to successfully obtain final approval from the Court for the DIP Credit Agreement, to consummate the actions contemplated by its restructuring plans, its ability to comply with the DIP Credit Agreement, or its ability to successfully reorganize under Chapter 11.

This Report on Form 8-K contains forward-looking statements (within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934) and expectations regarding the Company’s future performance. The Company has no duty to update such statements. Actual future events and circumstances could differ materially from the statements and the events and circumstances set forth in this Current Report due to various factors.

These factors include, among other things, the ability of the Company to continue as a going concern, the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 case, the preliminary nature of estimates of the costs and benefits of the Company’s various restructuring activities, the Company’s ability to effect its restructuring plans, risks associated with the Company’s ability to comply with its debtor-in-possession credit agreement, including financial covenants and deadlines in the Chapter 11 case, risks associated with third party motions in the Chapter 11 case, which may interfere with the Company’s ability to develop and consummate one or more plans of reorganization once such plans are developed, the potential adverse effects of the Chapter 11 proceedings on the Company’s liquidity, results of operations, brand or business prospects, increased legal costs related to the bankruptcy filing and other litigation, the effects of the bankruptcy filing on the interests of various creditors, equity holders and other stakeholders, the length of time in which the Company will operate in Chapter 11, the continuing commitment of the Company’s landlords and vendors, including delivery of inventory, the consent of the Company’s landlords to transfer or terminate leases relating to the affected stores, the inability to satisfy debt covenants, material declines in sales trends and liquidity, material changes in the Company’s business, prospects, results of operations or financial condition, and other risks and uncertainties, including those detailed in the Company’s filings with the U.S. Bankruptcy Court of the Eastern District of Missouri, the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, including those discussed in “Risk Factors,” in “Management’s Discussion and Analysis of Financial Position and Results of Operations” and in Note 2 to the Company’s financial statements, and in the Company’s Form 12b-25 filed on September 12, 2012, and in the Company’s other filings with the Securities and Exchange Commission.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Items 1.01 and 1.03 are incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BAKERS FOOTWEAR GROUP, INC.



Date: October 12, 2012	By:	/s/ Charles R. Daniel, III
	Charles R. Daniel, III Executive Vice President, Chief Financial Officer, Controller, Treasurer and Secretary

BAKERS FOOTWEAR GROUP INC 8-K