True Religion submits plan of reorganization and disclosure statement

By Caroline Salls

Pittsburgh, June 17 – True Religion Apparel, Inc. filed its plan of reorganization and related disclosure statement Tuesday with the U.S. Bankruptcy Court for the District of Delaware.

Non-tax priority claims will be paid in full in cash.

Holders of miscellaneous secured claims will be paid in full in cash or receive the collateral securing the claim.

Holders of debtor-in-possession financing new-money obligations will receive a share of a four-year exit term facility, which will bear interest at a rate of 12%, as well as backstop and lender fees and other fees, expenses and costs.

Holders of rolled up term loan obligation claims will receive a share of $45.63 million in second-lien convertible debt, plus interest accrued from the bankruptcy filing date to the plan effective date and all fees, costs and other charges related to the roll-up debt. The second-lien convertible debt will mature on the fifth anniversary of the effective date and bear interest at 13% and may be converted into equity in reorganized True Religion.

Holders of non-rolled up pre-bankruptcy term loan obligations will receive a share of new common shares to be issued under the plan, subject to dilution for conversion of the second-lien debt and by a management incentive plan.

Holders of general unsecured claims will receive cash from an avoidance actions trust.

Holders of existing equity interests will receive no distribution.

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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