Tuesday Morning Corporation has engaged AlixPartners, LLP as its financial advisor.
Tuesday Morning and certain of its subsidiaries on May 14, 2020, entered into a Limited Forbearance Agreement, dated as of May 14, 2020, with JPMorgan Chase Bank, N.A., in its capacity as administrative agent for itself and the other secured parties, as issuing bank and as swingline lender, and the other lenders party thereto. The Forbearance Agreement relates to the Credit Agreement, dated as of August 18, 2015 and as previously amended, among the Loan Parties, JPMorgan and the Lenders, and the related loan documents.
Under the terms of the Forbearance Agreement, the Administrative Agent, the Swingline Lender, the Issuing Bank and the Lenders have agreed to not exercise remedies under the Loan Documents and applicable law through May 26, 2020 (or earlier, if certain events occur) based on the event of default resulting from the Loan Parties suspending the operation of their business in the ordinary course and other events of default that may arise during the forbearance period as a result of failing to meet their obligations under certain agreements. The forbearance period is scheduled to end on May 26, 2020, or earlier if certain events occur.
Pursuant to the Forbearance Agreement, the commitment of the Lenders under the Credit Agreement has been permanently reduced from $180 million to $130 million and new swingline loans will not be advanced. During the forbearance period the Lenders are not obligated to fund further loans or issue or renew letters of credit under the Credit Agreement. The Forbearance Agreement requires loan repayments of $10 million under the Credit Agreement over the next week, and the application of unrestricted and unencumbered cash balances in excess of $32 million to the repayment of outstanding borrowings under the Credit Agreement. The Forbearance Agreement requires daily cash sweeps to the Company’s main concentration account, a deposit account control agreement over such account, the imposition of additional reporting obligations, including a business plan, cash flow forecasts and working capital plan, and adherence to such cash flow forecasts, subject to certain permitted variances.
The Forbearance Agreement also requires the Company to retain a liquidation consultant and financial advisor.
The Lenders have tapped Vinson & Elkins L.L.P. as legal counsel and Berkeley Research Group, LLC as restructuring and financial advisor.
The members of the lending consortium are:
Lender Revolving Commitment
JPMorgan Chase Bank, N.A. $72,222,222.22
2200 Ross Avenue 9th Floor
Dallas, TX 75201
Attn: Jon Eckhouse
Wells Fargo Bank $28,888,888.89
Bank of America, N.A. $28,888,888.89
Senior Vice President
The Lenders are represented by:
William L. Wallander, Esq.
Vinson & Elkins L.L.P.
Trammell Crow Center
2001 Ross Avenue, Suite 3900
Dallas, TX 75201-2975
Tuesday Morning is mulling a possible bankruptcy filing, according to unnamed Bloomberg sources, adding that those plans are not yet final as the 687-store chain looks for alternative financing. Tuesday Morning doesn’t have an eCommerce site. According to Bloomberg, the Company has drawn $55 million from its revolving credit facility as a precautionary measure in weathering the health crisis. Tuesday Morning closed all of its stores across the country on March 25.