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Westaff signs new forbearance agreement

October 03 2008

Westaff Inc. (NASD: WSTF) said this week it entered into another forbearance agreement with U.S. Bank and Wells Fargo Bank that will last until Nov. 21. The forbearance agreement will give Westaff more time to hammer out a longer-term agreement with the banks.

In May, the banks notified Westaff a default on a credit agreement because 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 CEO and Chairman Michael Willis said the forbearance agreement allows the company to focus on ongoing operations.

"Westaff has sufficient working capital to fund our operations and strategic growth objectives," Willis said. "Our business remains sound, and we are continuing to accomplish our financial, sales and customer service objectives."

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