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CENTRIC BRANDS: Reorganization Plan Confirmed by Judge

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Centric Brands Inc. (OTCBB: CTRCQ), a leading lifestyle brands collective, announced Sept. 18, 2020, that the United States Bankruptcy Court for the Southern District of New York issued a ruling confirming the Company’s Plan of Reorganization. The Plan was supported by the Company’s secured lenders and the Unsecured Creditors’ Committee. After all conditions have been finalized, the Company intends to emerge from Chapter 11 by the end of October with a recapitalized balance sheet, new financing facilities, significantly reduced debt and interest payments, and the full support of its lenders.

“Today’s announcement represents a critical moment in our journey to emerge as an even stronger company, poised for long-term growth. I am truly grateful to our dedicated employees for their hard work throughout this process and the COVID-19 pandemic. I’m also appreciative of the continued support of our brand licensors, retailers, sourcing network and lenders, which has allowed us to reach this milestone,” said Mr. Jason Rabin, CEO of Centric Brands.

Mr. Rabin continued: “We continue to execute against our strategy while maintaining our valued, long-standing relationships with our business partners. With a strengthened financial position, I am excited about our strong future ahead.”

Centric Brands expects to emerge as a private company, under the supportive ownership of its current lenders led by Blackstone, Ares, and HPS. Upon emergence, the Company expects to substantially reduce its funded second lien indebtedness, thereby positioning the business for future growth and success. Blackstone will exchange its second lien debt for equity interests in the reorganized company. Existing senior lenders Ares and HPS will retain their senior loan positions and will receive equity interests in the reorganized company.

Further, as contemplated under the terms of the Plan, the Company expects to secure new exit financing in the form of a new securitization facility, as well as new revolving and term loan facilities from its current secured lenders, which will help fund the Company’s exit from Chapter 11 and its go-forward operations.

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.