David’s Bridal bankrupt; will restructure term loans, unsecured notes

By Caroline Salls

Pittsburgh, Nov. 19 – David’s Bridal, Inc. made a pre-packaged Chapter 11 bankruptcy filing on Monday in the U.S. Bankruptcy Court for the District of Delaware.

The company said it entered into a restructuring support agreement on Sunday with holders of 85% of the $481 million outstanding principal amount of pre-bankruptcy term loans, holders of 97% of the $270 million outstanding principal amount of unsecured notes and its principal equity holders.

The agreement outlines the terms for a restructuring of the pre-bankruptcy term loans and unsecured notes and leaves general unsecured claims unimpaired.

Specifically, under the plan, holders of the pre-bankruptcy term loan will receive a share of a takeback term loan, a term loan stock allocation and the right to participate in a priority exit facility.

Holders of unsecured notes will receive a share of an unsecured notes stock allocation and warrants.

Interests in the parent company will be cancelled.

Priority non-tax claims, other secured claims, pre-bankruptcy ABL claims, general unsecured claims and intercompany claims and intercompany interests will be satisfied in full.

Within 60 days of the plan effective date, the reorganized debtors will adopt a post-restructuring management incentive plan under which up to 10% of the new common stock will be reserved for issuance of awards to eligible members of management.

Under the restructuring support agreement, David’s Bridal is required to obtain confirmation of the plan by Jan. 7, and the plan must take effect by Jan. 14.

In conjunction with the bankruptcy filing, the company has obtained a commitment for $125 million in revolving debtor-in-possession financing and a $60 million DIP term loan.

Bank of America, NA is the DIP revolver agent and lender, and Cantor Fitzgerald Securities is the DIP term loan agent.

The DIP facilities will mature in 180 days.

Interest on the revolver will accrue at the alternate Base rate plus 200 basis points for Base rate loans and Libor plus 300 bps for Libor loans, and interest on the term loan will accrue at the alternate Base rate plus 650 bps for Base rate loans and Libor plus 750 bps for Libor loans.

According to court documents, David’s Bridal has $100 million to $500 million in assets and $500 million to $1 billion in debt. As of Monday, the company had funded debt facilities in place with a face amount of $819 million, of which $549 million is secured and $270 million is unsecured.

The company’s largest unsecured creditors are indenture trustee Wilmington Trust, NA of Guilford, Conn., with a $270 million claim for the company’s 7¾% senior note due 2020 and California Wage & Hour Class Action, based in Los Angeles, with a $1.35 million litigation settlement claim.

No other unsecured creditors were listed with claims of $1 million or more.

Young Conaway Stargatt & Taylor, LLP is representing the company in its Chapter 11 proceedings.

David’s Bridal is a Conshohocken, Pa.-based bridal retailer. The Chapter 11 case number is 18-12635.

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