July 26, 2018 – The U.S. Bankruptcy Court has approved [Docket No.679] Claire’s Stores Disclosure Statement [Docket No. 669]. As previously reported, “The Debtors, the Creditors’ Committee, the Unsecured Notes Trustee, and the Ad Hoc First Lien Group, with the assistance of their advisors, engaged in vigorous, arm’s-length negotiations to resolve all their respective issues on a consensual basis. These negotiations were a success, and the modifications to the July 7 Plan described herein resolve each of those issues and objections (collectively, the ‘Global Plan Settlement’). In particular, the Global Plan Settlement significantly improves recoveries for Unsecured Claims under the Plan, compared to the July 7 Plan. These improved recoveries are being carved out of the collateral securing First Lien Debt Claims by agreement of the Ad Hoc First Lien Group. Given the Debtors’ valuation, recoveries of this size to unsecured creditors would be impossible absent the Global Plan Settlement. In particular, the modified Unsecured Claim recoveries provided on account of the Global Plan Settlement include: a $16 million cash pool for Holders of General Unsecured Elective Claims; an $18 million cash pool for the class of Holders of First Lien Debt Deficiency Claims and Second Lien Notes Claims, provided such classes vote to accept the Plan; and a $20 million cash pool for the class of Holders of Unsecured Notes Claims, provided such class votes to accept the Plan. This revised treatment, resulting from the Global Plan Settlement, substantially improves unsecured creditor recoveries, which, under the July 7 Plan, previously consisted of a $3.9 million cash pool for all Unsecured Claims (including First Lien Deficiency Claims, Second Lien Claims, and Unsecured Notes Claims) and a $6.0 million cash pool for General Unsecured Elective Claims”
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