True Religion Apparel plan of reorganization effective as of Oct. 19

By Sarah Lizee

Olympia, Wash., Oct. 20 – True Religion Apparel, Inc.’s third amended joint Chapter 11 plan of reorganization became effective on Monday, according to a notice filed with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan was confirmed on Oct. 6.

Under the plan, 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 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, 2020 under Chapter 11 case number 20-10941.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.