Centric Brands Inc. and its debtor affiliates filed with the U.S. Bankruptcy Court for the Southern District of New York a Disclosure Statement describing Joint Chapter 11 Plan of Reorganization dated May 29, 2020.
Holders of Class 3 First Lien Term Loan Claims in the amount of [$_] will receive (i) the face amount of its allowed First Lien Term Loan Claim in indebtedness under the Exit First Lien Term Loan Facility; and (ii) its Pro Rata share of 30 percent of the Reorganized Centric Equity Interests, subject to dilution by the Management Incentive Plan (if any).
Holders of Class 4 Second Lien Secured Claims in the amount of $724.2 million will receive each receive its pro rata share of 70 percent of the Reorganized Centric equity interests, subject to dilution by the Management Incentive Plan (if any).
2024 Convertible Notes Claims in Class 5 will be canceled, released, discharged, and extinguished as of the Effective Date, and will be of no further force or effect, and holders of 2024 Convertible Notes Claims will not receive any distribution on account of such 2024 Convertible Notes Claims.
Class 7 General Unsecured Claims will be canceled, released, discharged, and extinguished as of the Effective Date, and will be of no further force or effect, and Holders of General Unsecured Claims will not receive any distribution on account of such General Unsecured Claims.
Class 11 Centric Interests will be canceled without any distribution on account of such Interests.
The Reorganized Debtors will fund distributions under the Plan with (a) Cash on hand; (b) the issuance and distribution of Reorganized Centric Equity Interests; (c) proceeds from the Exit First Lien Revolving Loan Facility; (d) proceeds from the Exit Securitization Facility; and (e) proceeds from the Exit First Lien Term Loan Facility.
On the Effective Date, Reorganized Centric and each of the other Reorganized Debtors will be a private company. Reorganized Centric and any of the Reorganized Debtors will take all necessary action immediately on or after the Effective Date to suspend any requirement to (a) be a reporting company under the Securities Exchange Act and (b) file reports with the Securities and Exchange Commission.
On the Effective Date either (i) the Reorganized Debtors will enter into a new securitized facility with PNC, on terms reasonably acceptable to the Debtors and the Required Consenting Creditors, (ii) the Reorganized Debtors will enter into a new receivables facility with third parties (other than PNC), on terms reasonably acceptable to the Debtors and the Required Consenting Creditors or (iii) the Exit First Lien Revolving Loan Facility will be modified.
A full-text copy of the Disclosure Statement dated May 29, 2020, is available at https://tinyurl.com/y8nuymcw from PacerMonitor at no charge.
The Debtors are represented by:
Ropes & Gray LLP
1211 6th Ave
New York, NY 10036
Attn: Gregg M. Galardi
Cristine Pirro Schwarzman
About Centric Brands
Centric Brands Inc. designs, produces, merchandises, manages and markets kidswear, accessories, and men’s and women’s apparel under owned, licensed and private label brands. Currently, the company and its affiliates license over 100 brands, including AllSaints, BCBG, Buffalo, Calvin Klein, Disney, Frye, Herve Leger, Jessica Simpson, Joe’s, Kate Spade, Kenneth Cole, Marvel, Michael Kors, Nautica, Nickelodeon, Spyder, Timberland, Tommy Hilfiger, Under Armour, and Warner Brothers. The companies sell licensed products through both retail and wholesale channels.
Centric Brands and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22637) on May 18, 2020. As of March 31, 2020, Debtors disclosed $1,855,722,808 in total assets and $2,014,385,923 in total liabilities.
Judge Sean H. Lane oversees the cases.
The Debtors tapped Ropes & Gray, LLP as bankruptcy counsel; PJT Partners, Inc. as investment banker; Alvarez & Marsal, LLC as financial advisor; and Prime Clerk, LLC as notice, claims and balloting agent.