Muji U.S.A. receives confirmation of Chapter 11 reorganization plan

By Sarah Lizee

Olympia, Wash., Dec. 21 – Muji U.S.A. Ltd.’s Chapter 11 plan of reorganization was confirmed Monday by the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the plan calls for a reorganization of the debtor’s operations under which the reorganized company will operate a leaner and more profitable Muji-branded store portfolio than it did prior to the bankruptcy filing, all while continuing its growth of online sales.

To that end, the plan preserves the going-concern value of the debtor’s business, maximizes recoveries to constituents and protects the jobs of the debtor’s employees.

More specifically, all allowed administrative claims other than debtor-in-possession facility claims and allowed priority tax claims will be paid in full in cash under the terms of the plan.

Allowed DIP facility claims will receive a principal portion of the $22 million exit facility equal to the DIP facility claim amount, less some fees and expenses that will be paid to the DIP lender on the effective date.

All allowed other secured claims and allowed other priority claims will be paid in full in cash or receive other treatment that renders the claims unimpaired.

Each holder of allowed class 3 general unsecured claims will receive a pro rata share of the GUC cash distribution pool, and provided class 3 votes to accept the plan, each holder of an allowed class 3 claim will also receive a release from the debtor and its estate of any avoidance action against that holder.

Parent company and DIP lender Ryohin Keikaku Co., Ltd. will contribute its RKJ unsecured claims as capital in the reorganized debtor.

The reorganized debtor will fund distributions with cash on hand and proceeds from the exit facility.

According to a term sheet filed Dec. 8, the exit facility with Ryohin Keikaku as lender will bear interest at 8% per year. The facility will mature on Dec. 31, 2023.

Muji is a New York-based apparel and food retailer. The company filed bankruptcy on July 10 under Chapter 11 case number 20-11805.

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