True Religion Apparel and four affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 17-11460. The Company, which designs, markets, sells and distributes apparel, is represented by Laura Davis Jones of Pachulski Stang Ziehl & Jones. The Company also announced that it has secured stakeholder support for a comprehensive financial recapitalization of the Company’s capital structure. In signing a restructuring support agreement (RSA) with the substantial majority of its term loan lenders and its sponsor, TowerBrook Capital Partners, the Company will reduce its debt by over $350 million and convert it into the substantial majority of the reorganized Company’s equity.
Concurrent with its Chapter 11 petition, the Company also filed with the Court a Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. The Plan provides for full payment of claims of continuing trade creditors, which includes continuing vendors, suppliers and landlords. The Disclosure Statement notes, ” The Debtors, Equity Parent, and Consenting Creditors believe that the financial restructurings, the operational restructuring (through, among other things, focused lease rejections) and the other transactions reflected in the Plan will position the Reorganized Debtors well to succeed post emergence from bankruptcy. With a sustainable capital structure aligned with the Debtors’ revised business plan and adequate operating liquidity, the Reorganized Debtors will be positioned to compete more effectively in the evolving retail industry.”
John Ermatinger, president and C.E.O. of True Religion Apparel, comments, “After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success.” True Religion Apparel has secured post-petition debtor-in-possession financing from Citizens Bank for up to $60 million.
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