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John Varvatos Enterprises, Inc. – Seeks 4 Month Extension of Exclusive Plan Filing Period until May 4th to Work Toward Resolution of Remaining Case Dismissal Objections

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January 4, 2021 – The Debtors filed a motion to extend (for a second time) the periods during which they have an exclusive right to file a Plan and solicit acceptances thereof, through and including May 4, 2021 and June 30, 2021, respectively [Docket No. 594]. Absent the requested relief, the Plan filing and solicitation periods are scheduled to expire on January 4, 2021 and March 2, 2021, respectively.

The extension motion comes about one month after the Court issued an initial order in the process for dismissal of the Debtors' Chapter 11 cases. Calling the initial dismissal order a "landmark moment" in their cases, the Debtors said in the extension motion that they "should be permitted to continue to work toward the resultion of these chapter 11 cases in accordance with the initial dismissal order and for the benefit of all creditors."

According to the extension motion, "the Debtors have obtained entry of the Initial Dismissal Order which provides a path forward for the wind-down of the Debtors’ estates. The Debtors submit that they should be permitted to continue to work toward the resolution of these chapter 11 cases in accordance with the Initial Dismissal Order and for the benefit of all creditors. Accordingly, the extension request is reasonable and consistent with the efficient prosecution of the chapter 11 cases and section 1121 of the Bankruptcy Code….

This is the Debtors’ second motion to extend the Exclusive Periods and the Debtors are on the verge of achieving a successful resolution of these chapter 11 cases that will benefit all creditors as administrative expense and priority unsecured creditors will receive payment in full on account of their claims and general unsecured creditors will receive a pro rata distribution from a $2 million fund created in connection with the Sale. As such, the Debtors submit that creditors will not be prejudiced by an extension of the Exclusive Periods that will allow the Debtors to continue to diligently work towards dismissal of these chapter 11 cases."

Background

On October 23, 2020, the Debtors filed a Dismissal Motion [Docket No. 516], saying they had determined that the dismissal of their cases would be the most expeditious and cost-effective method of winding down the Debtors’ estates as there were no claims or causes of actions available to pursue for additional value for the Debtors’ estates.

The extension motion explains that the Debtors received objections to the Dismissal Motion from Judgment Creditors, 13 Opt-In plaintiffs and a judgment class that the Court certified (the “Class of Judgment Creditors”) (D.I. 530) and the Westchester Fire Insurance Company (“Westchester”) [Docket No. 534].  However, on November 30, 2020, the Court entered an order (D.I. 555) (the “Initial Dismissal Order”) overruling the objection of the Class of Judgment Creditors and approving the Dismissal Motion. The Initial Dismissal Order includes language to partially resolve the objection of Westchester, with the remaining issues raised in Westchester’s objection to be decided at a later date.

The Debtors' extension motion provides, “The main goal of these cases, which has since been achieved, has been the sale of substantially of the Debtors’ assets. Since before the bankruptcy cases were filed, the Debtors have aggressively pursued a sale of substantially all of their assets. This involved an extensive prepetition and post-petition marketing process that culminated in the sale of the Debtors’ assets to Lion/Hendrix Cayman Limited (‘LHCL’) (the ‘Sale’) under section 363 of the Bankruptcy Code on July 24, 2020 (D.I. 376). The Sale was the result of a long and sometimes contentious process that required the Debtors' and their professionals’ extensive diligence and attention. The Sale involved, among other things…resolution of (i) a motion by the Committee for standing to challenge LHCL’s credit bid for the purchase of the Debtors’ assets and the Committee’s related objection to the sale, (ii) an adversary proceeding commenced against LHCL to equitably subordinate its claims, (iii) objections to the sale submitted by numerous other parties in interest and (iv) other sale-related issues…

Entry of the Initial Dismissal Order is a landmark moment in the Debtors’ chapter 11 cases, as it charts the path for the Debtors to wind down their estates and make distributions to creditors in the most cost-efficient manner possible. After the Debtors, among other things, reconcile proofs of claims filed in the chapter 11 cases and resolve certain outstanding issues, including those raised in Westchester’s objection, the Debtors will file a certification of counsel requesting entry of a dismissal order, thereby bringing an end to these chapter 11 cases. Indeed, the Debtors have filed their first two omnibus objections to proofs of claim (D.I. 582, 583) (the ‘Claims Objections’), and are reviewing the remainder of the claims against the Debtors’ estate. Further, Westchester has filed a motion (D.I. 570) to resolve the remaining issues raised in its objection to the Dismissal motion. The Debtors are hopeful that they and Westchester will reach a consensual resolution with respect to the motion, but are preparing for discovery and to file a response if no resolution is reached.”

The Court scheduled a hearing to consider the extension motion for January 26, 2021, with objections due by January 18, 2021.

About the Debtors

According to the Debtors: “John Varvatos Enterprises is a global lifestyle brand launched in 2000 with a collection of tailored clothing and sportswear. John Varvatos now represents an entire men’s lifestyle that includes footwear, bags, belts, eyewear, jewelry, fragrances, the John Varvatos Star USA collection, and Bootleg by John Varvatos. John Varvatos encompasses a modern, rebel edge while staying true to our artisan roots. Visit us at johnvarvatos.com or join us on social media at @johnvarvatos.

The Zorda Declaration [Docket No. 4] adds: “John Varvatos is a globally recognized luxury menswear brand that fuses contemporary style with a ‘rock n’ rol’” culture. John Varvatos is a globally recognized luxury menswear brand that fuses 4contemporary style with a “rock n’ roll” culture. Mr. Varvatos himself – the legendary designer who began his creative calling with design roles at Ralph Lauren before being appointed as head of menswear design at Calvin Klein in 1990 – founded the brand in 2000, which has since become a premier American lifestyle menswear collection, combining distinctive fabrics, heritage-inspired silhouettes, and artisanal details to embody a modern classic aesthetic with an edge.”

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The post John Varvatos Enterprises, Inc. – Seeks 4 Month Extension of Exclusive Plan Filing Period until May 4th to Work Toward Resolution of Remaining Case Dismissal Objections appeared first on Daily Bankrupt Company Updates | Bankrupt Company News.


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