Men’s Wearhouse, Jos A. Bank Pressed By Virus Into Ch. 11
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Law360 (August 3, 2020, 12:08 PM EDT) — The parent company of menswear chains Jos A. Bank and Men’s Wearhouse said Monday it filed for Chapter 11 in Texas bankruptcy court with a prepackaged equity swap plan in hand to cut $630 million in debt as it deals with the impact of the COVID-19 pandemic.
In an announcement Monday of the company’s late Sunday Chapter 11 filings, Tailored Brands Inc.’s CEO Dinesh Lathi said while the company had made progress adjusting to the pre-COVID retail environment the “unprecedented impact” of the pandemic forced the company to “further adapt and evolve.”
“Reaching an agreement with our lenders represents a critical milestone toward our goal of becoming a stronger company that has the financial and operational flexibility to compete and win in the rapidly evolving retail environment,” he said.
The California-based company said it had commitments for $500 million in debtor in possession financing from its existing revolving lenders and that it expected this and its cash on hand would be enough to continue operations through the bankruptcy.
Tailored Brands owns and operates the Men’s Wearhouse, Jos A. Bank, Moores Clothing for Men and K&G Fashion Superstore menswear chains. According to its court filings on Sunday it currently has about 18,000 employees in just under 1,400 stores in the U.S. and Canada.
According to its court filings it currently has about $1.4 billion in funded debt.
In her chapter 11 declaration chief restructuring officer Holly Etlin said the proposed plan would swap the current $877.4 million in term loan debt for equity ownership in the reorganized company and a pro rata share of an exit term loan worth between $325 million and $425 million. The DIP lenders would received a pro rata share
The company has retained PJT Partners as its financial advisor and AlixPartners as its restructuring advisor.
Tailored Brands is represented by Matthew D. Cavenaugh, Kristhy Peguero, Veronica A. Polnick and Victoria Argeroplos of Jackson Walker PC and Joshua A. Sussberg, Christopher J. Marcus, Aparna Yenamandra and James H.M. Sprayregen of Kirkland & Ellis LLP.
The case is In re: Tailored Brands Inc. et al., case number 20-33900 in the U.S. Bankruptcy Court for the Southern District of Texas.
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