True Religion plan draws objection from U.S. trustee for releases

New York, Sept. 29 – True Religion Apparel, Inc.’s plan of reorganization should not be confirmed because it contains improper releases and gives the plan supplement priority over the plan, the U.S. trustee said in a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

The trustee said that the “deemed consent” to the releases does not satisfy the legal standard because the releasing parties “do not appear to be receiving any consideration in exchange for the release, let alone ‘reasonable consideration.’”

In addition, the trustee said that the plan supplement has not yet been filed even though the voting deadline has passed, depriving creditors of the chance to change their vote if there is a conflict between the plan and the supplement.

A plan confirmation hearing is scheduled for Oct. 5.

As previously reported, the company reached a restructuring support agreement with the substantial majority of its term loan lenders and sponsor TowerBrook Capital Partners.

True Religion, a Vernon, Calif.-based jeans and jeans-related sportswear company, filed bankruptcy on July 5. The Chapter 11 case number is 17-11460.

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