True Religion has emerged from Chapter 11 bankruptcy protection for the second time in less than three years.
The denim and apparel brand, which filed for bankruptcy in April, said its court-approved reorganization plan has allowed the company to reduce its operating costs and significantly lower its debt and provide it with liquidity to execute upon its growth plans during the next several years. Under the plan, a group holding term loans of more than $65 million will accept 88% of the reorganized company’s equity.
The plan also keeps more than 50 of True Religion’s approximate 87 stores open.
“We want to thank the company’s loyal and diverse customer base, which remained faithful to the brand both prior to and during the pandemic,” said Michael Buckely, who rejoined True Religion as CEO in November 2019. “Although we had to make the very difficult decision to lower our overall store count and employee base, our successful emergence from bankruptcy as a stronger company is a testament to the contribution of all of our employees throughout the brand’s history.”
Simon Property Group, the landlord on a substantial number of True Religion’s retail stores, was an essential partner in the company’s reorganization, Buckley added. True Religion’s lenders, including Farmstead Capital Management and Crystal Financial, also worked tirelessly to reach an agreement and facilitate the company’s turnaround, he noted.
“We are grateful for the tremendous support and collaboration from Simon Property, Farmstead Capital Management, and Crystal Financial, among others, without whose partnership and belief in True Religion’s prospects we would not be embarking on this exciting next chapter in the Company’s journey,” Buckley said.
True Religion previously filed for bankruptcy in summer 2017. It exited some four months later, under a reorganization plan that reduced the company’s nearly $500 million debt through a debt-for-equity swap.