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Westaff Inc. (NASD: WSTF) said Friday it entered into another forbearance agreement. The new agreement lasts through Sept. 30; a previous forbearance agreement with U.S. Bank and Wells Fargo Bank expired Aug. 26.
"We agreed to this short-term forbearance while we continue to work with our banks to develop a longer term arrangement," said senior VP and CFO Christa Leonard. "This agreement provides us additional time while we continue to focus on improving our financial performance."
The banks notified Westaff of the default on May 23. The company didn't have the required minimum fixed charge coverage ratio, according to a filing with the U.S. Securities and Exchange Commission.
Westaff also announced Friday that it secured a $3 million loan from its largest shareholder, DelStaff LLC. Members of DelStaff include H.I.G. Staffing 2007 Ltd., Alarian Associates Inc. and Westaff CEO Michael Willis.