Chinos Holdings, Inc., et al., submitted a Plan and a Disclosure Statement.
The material terms of the Plan are:
* Each holder of an Allowed ABL Facility Claim will receive cash in the full amount of its Allowed ABL Facility Claim.
* Each holder of an Allowed Term Loan Secured Claim will receive its pro rata share of the common equity of Reorganized Chinos Holdings (the “New Common Equity”) representing, in the aggregate, 76.5% of the New Common Equity issued on the Effective Date remaining after distributions on account of the Backstop Premium and the New Equity Allocation, and of any other New Common Equity distributed pursuant to the Plan (other than the New Common Equity distributed to holders of IPCo Notes Claims as described below), subject to dilution from New Common Equity (i) issuable upon exercise of the New Warrants, (ii) issued pursuant to the Management Incentive Plan, and (iii) otherwise issued by the Reorganized Debtors after the Effective Date, including the Incremental Debt Equity.
* Each holder of an Allowed IPCo Notes Claim will receive its pro rata share of New Common Equity representing, in the aggregate, 23.5% of the New Common Equity issued on the Effective Date remaining after distribution on account of the Backstop Premium, the New Equity Allocation, and of any other New Common Equity distributed pursuant to the Plan (other than the New Common Equity distributed to holders of Term Loan Secured Claims as described above), subject to dilution from New Common Equity (i) issuable upon exercise of the New Warrants, (ii) issued pursuant to the Management Incentive Plan, and (iii) otherwise issued by the Reorganized Debtors after the Effective Date, including the Incremental Debt Equity.
* Each holder of a general unsecured claims that will provide goods and services necessary to the operation of the Reorganized Debtors, as determined by the Debtors in consultation with the Requisite Consenting Support Parties (the “Ongoing Trade Claims”) and that has executed a trade agreement that expressly designates such party as a holder of an Ongoing Trade Claim, will on the Effective Date receive its pro rata share of $71 million in cash; provided that the aggregate amount of cash distributed on account of any Ongoing Trade Claim will not exceed 50% of the allowed amount of such Claim.
* Holders of Other General Unsecured Claims, which include rejection damages claims and the Term Loan Deficiency Claims, will, on the Effective Date, receive their pro rata share of cash allocable to the applicable Debtor from a cash pool that will aggregate (a) $3 million if the class votes to accept the Plan and (b) $1 million if the class votes to reject the Plan; provided, that the aggregate amount of cash distributed on account of any Other General Unsecured Claim will not exceed 50% of the allowed amount of such Claim. Creditors may recover more than 1.6% of their claims.
* On the Effective Date, all Existing Holdings Preferred Equity and Existing Holdings Equity shall be cancelled and will be of no further force and effect, regardless of whether surrendered for cancellation.
The Reorganized Debtors will have sufficient funds to make the distributions required under the Plan and funds will be available to them under the Exit ABL Facility and the New Term Loans.
A full-text copy of the Disclosure Statement dated August 10, 2020, is available at https://tinyurl.com/y59rnsg4 from PacerMonitor.com at no charge.
Attorneys for the Debtors:
Ray C. Schrock, P.C.
Ryan Preston Dahl
Candace M. Arthur
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
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Tyler P. Brown
Henry P. (Toby) Long, III
HUNTON ANDREWS KURTH LLP
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219
Telephone: (804) 788-8200
Facsimile: (804) 788-8218
About Chinos Holdings
Chinos Holdings, Inc., designs apparels, offering clothing for men, women and children, as well as accessories. Chinos Holdings serves customers worldwide.
Chinos Holdings, Inc. and its affiliates, including J.Crew Group, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32181) on May 4, 2020.
At the time of the filing, the Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range.
Judge Keith L. Phillips oversees the cases.
The Debtors tapped Weil, Gotshal & Manges, LLP as bankruptcy counsel; Hunton Andrews Kurth, LLP as local counsel; Lazard Freres & Co. LLC; Alixpartners, LLP as financial advisor; Hilco Real Estate, LLC as real estate advisor; KPMG LLP as tax consultant; and Omni Agent Solutions, LLC as claims, noticing and solicitation agent and as administrative advisor.
The official committee of unsecured creditors appointed in Debtors’ bankruptcy cases tapped Pachulski Stang Ziehl & Jones LLP as legal counsel; Hirschler Fleischer, P.C. as local counsel; and Province, Inc. as financial advisor.