Tailored Brands Chapter 11 reorganization plan effective as of Dec. 1

By Sarah Lizee

Olympia, Wash., Dec. 2 – Tailored Brands, Inc.’s Chapter 11 plan of reorganization became effective on Tuesday, according to a notice filed in the U.S. Bankruptcy Court for the Southern District of Texas.

The plan was confirmed on Nov. 13, as previously reported.

Tailored Brands said it will emerge with a strengthened capital structure having eliminated $686 million of funded debt from its balance sheet. The capital structure of the reorganized company is expected to consist of a $430 million asset-based lending facility, a $365 million exit term loan and $75 million of cash from a new debt facility to support ongoing operations and strategic initiatives.

Under the plan, holders of allowed claims under the DIP ABL facility will be paid in full, unless certain conversion conditions under the DIP credit agreement are fully satisfied as of the effective date, in which case holders will receive their pro rata share of and interest in the exit ABL facility.

Holders of allowed claims under the prepetition term loan credit agreement will receive a pro rata share and interest in the exit term loan facility and 100% of new equity less the aggregate amount of new equity distributed to holders of allowed other general unsecured claims that select the equity election.

Holders of allowed claims arising under or in connection with the ABL documents with respect to terminated interest rate swaps will be paid in full in cash in the amount of the allowed swap claim from the proceeds of the DIP ABL collateral and, solely to the extent that there is a deficiency of DIP ABL priority collateral, from the proceeds of the term loan collateral.

Holders of Moores general unsecured claims will receive either payment in full in cash, reinstatement of their claims or other treatment rendering the claims unimpaired.

Holders of allowed other general unsecured claims will receive at their option either their pro rata share of and interest in 3% of the new equity, subject to dilution by the management incentive plan or cash in an amount equal to 50% of the value of the new equity to which holders would have been entitled to receive under the new equity option.

Holders of allowed GUC convenience claims will receive payment in full in cash, have their claims reinstated or receive other treatment rendering their claim unimpaired.

Holders of existing equity will receive no distribution.

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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