True Religion back in bankruptcy; employees furloughed amid pandemic

By Caroline Salls

Pittsburgh, April 13 – True Religion Apparel Inc. filed Chapter 11 bankruptcy on Monday in the U.S. Bankruptcy Court for the District of Delaware.

True Religion filed a previous Chapter 11 case on July 5, 2017. The company emerged from that case on Oct. 27, 2017.

The company said in a Monday court filing that it filed the latest cases “amid an unprecedented health crisis with difficult social, political and economic implications.”

“Existing liquidity constraints, accelerated by the Covid-19 pandemic and the attendant government stay-at-home orders and edicts that locked the debtors out of all their brick-and-mortar retail locations, and the hundreds of brick-and-mortar locations of the debtors’ wholesale business customers, precipitated the debtors’ difficult decision to furlough all non-essential employees and commence these cases as the only available means to maximize value for their various stakeholders,” True Religion said.

The motion for joint administration of all of the True Religion debtors’ cases said the requested relief was critical to maintaining the debtors’ viability as a going concern and necessary to ultimately operate their businesses when the mandated closure of non-essential retail is lifted.

No other case information had yet been filed with the court as of late Monday afternoon.

According to court documents, True Religion has $100 million to $500 million in both assets and debt.

The company’s largest unsecured creditors are OA SA de CV of La Paz, El Salvador, with a $6.88 million trade claim; Lya Group of Los Angeles, with a $3.37 million trade claim; Dhruv Global Ltd. of Haryana, India, with a $3.29 million trade claim; Excel Kind Industrial Ltd. of Los Angeles, with a $2.83 million trade claim; Manchester United Football Club Ltd. of New York, with a $2.59 million trade claim; Oved Premium LLC of New York, with a $1.58 million trade claim; Frontline Clothing Ltd. of Hong Kong, with a $1.51 million trade claim; Matrix Clothing (P) Ltd. of Haryana, India, with a $1.47 million trade claim; CFL Distributing Inc. of Santa Fe Springs, Calif., with a $1.33 million trade claim; and Facebook, Inc. of Menlo Park, Calif., with a $1.31 million trade claim.

Cole Schotz PC is representing True Religion in its Chapter 11 proceedings.

True Religion is a Vernon, Calif.-based jeans and jeans-related sportswear company. The Chapter 11 case number is 20-10941.

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