Tailored Brands statement draws objection from creditors committee

By Sarah Lizee

Olympia, Wash., Oct. 2 – Tailored Brands, Inc.’s disclosure statement for its first amended joint plan of reorganization drew an objection Thursday from the official committee of unsecured creditors, according to filing with the U.S. Bankruptcy Court for the Southern District of Texas.

The committee said the disclosure statement contains the debtors’ conclusion that their enterprise value ranges between $850 million and $1 billion.

“There is no foundation supporting the debtors’ valuation and there is no explanation in the disclosure statement as to why this new value is less than the $1.276 billion value the debtors presented to their lenders and other third parties in early July 2020 in connection with their efforts to source debtor in possession financing,” the committee said.

“Nor is there any explanation of why the debtors believe the 3% highly diluted de minimis distribution to class 5(b) general unsecured creditors is significantly less than the 20% equity distribution the debtors proposed to the term lenders as part of negotiations over the RSA.

“What appears clear is that the term lenders have hijacked the plan process and are attempting to divert value from class 5(b) general unsecured creditors in violation of the Bankruptcy Code.”

Tailored Brands is a Fremont, Calif.-based specialty retailer of men’s tailored clothing. The company filed bankruptcy on Aug. 2 under Chapter 11 case number 20-33900.

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