True Religion DIP financing hearing postponed by one week to May 27

By Caroline Salls

Pittsburgh, May 19 – True Religion Apparel, Inc.’s debtor-in-possession financing hearing has been adjourned to May 27, according to an agenda filed Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

The hearing was previously scheduled for May 20.

As previously reported, True Religion’s official committee of unsecured creditors filed an objection to the DIP financing motion on Monday.

The committee said it has supported the company’s efforts to preserve value as a going concern, agreeing to concessions for the DIP secured parties in a second interim order, including not objecting to the rollup of $74 million of pre-bankruptcy debt or approval of a $2.8 million backstop fee.

“The quid pro quo for these concessions was for the debtors and [lender Farmstead Capital Management] to engage the committee in good faith negotiations regarding an exit strategy,” the objection said. “Unfortunately, this has not occurred.”

According to the objection, True Religion has until May 22 to announce either a plan or sale strategy and, if it opts for a plan, to file a plan and disclosure statement acceptable to Farmstead. However, the committee said it still has not been given an exit term sheet or draft plan and disclosure statement, and it has not been included in any related negotiations.

True Religion is a Vernon, Calif.-based jeans and jeans-related sportswear company. The company filed bankruptcy on April 13 under Chapter 11 case number 20-10941.

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