Denim brand and retailer True Religion has filed for Chapter 11 bankruptcy protection in Delaware and signed a restructuring agreement with a majority of its lenders. The company will continue to operate business as usual, however it is likely to close some of its stores.
The 15-year-old California-based company currently has about 140 stores in 33 states and foreign markets and more than 1,900 employees. It also sells its products in such major department stores as Nordstrom, Bloomingdale’s, and Saks Fifth Avenue.
According to reports, the company has listed assets and liabilities in the range of $100 million to $500 million. The restructuring agreement with lenders, including TowerBrook Capital Partners, will slash the company’s debt by over $350 million. Most creditors who are critical to the business should end up being paid in full. In addition, True Religion has secured post-petition debtor-in-possession (DIP) financing from Citizens Bank for up to $60 million.
The bankruptcy plan could take about 90 to 120 days to receive confirmation from the bankruptcy court.