Item 1.01. Entry into a Material Definitive Agreement.
The information set forth below in Item 1.03 in this Current Report on Form 8-K under the caption "Restructuring Support Agreement" is hereby incorporated by reference in this item 1.01.
Item 1.03. Bankruptcy or Receivership.
Voluntary Petitions for Bankruptcy
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Additional information about the Chapter 11 Cases, including access to
Restructuring Support Agreement
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In conjunction with the execution of the RSA, the Company entered into two asset
purchase agreements (each, an "APA" and together, the "Asset Purchase
Agreements") with (i)
Upon filing for the Chapter 11 Cases, the Company will contemporaneously
initiate a sale process for the Active Division Assets, the Joe's Jeans brand,
and the Company's remaining brands, which is intended to be value-maximizing by
providing third parties with the ability to provide higher and/or better bids.
The Company plans to ultimately sell all or substantially all of its assets to
the Stalking Horse Bidders and/or one or more third party purchasers determined
through an auction process supervised by the
The RSA also contemplates debtor-in-possession financing pursuant to a DIP
Credit Agreement (as defined and described below), to be provided by the
Consenting Lenders, which will provide the Debtors up to
Pursuant to the RSA, each of the Debtors and the Consenting Lenders has made customary commitments to each other. The Debtors have agreed to, among other things, seek to implement the Sale Transactions and other matters contemplated by the RSA and to satisfy certain other covenants. The Consenting Lenders have also committed to support and to use commercially reasonable efforts to take, or refrain from taking, certain actions in furtherance of the Sale Transactions and other matters contemplated in the RSA and to provide the necessary financing for the Chapter 11 Cases through, among other things, the DIP Credit Agreement.
The RSA and other transaction documents contain milestones for the progress of
the Chapter 11 Cases (the "Milestones"), which include the dates by which the
Debtors are required to, among other things, obtain certain orders of the
· On or prior to
entered into the Asset Purchase Agreements (as defined in the RSA) with each of
the respective Stalking Horse Bidders;
· No later than one (1) calendar day after the Petition Date, the Company shall
file a motion inBankruptcy Court to approve the Debtors' consensual use of cash collateral and debtor-in-possession financing facility pursuant to the terms set forth in the DIP Term Sheet (the "DIP Facility");
· No later than one (1) business day after the Petition Date, the Debtors shall
file a motion requesting (a) an order from the
Procedures Order") (i) approving the proposed Bidding Procedures, and (ii) . . .
Item 2.04. Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
The filing of the Chapter 11 Cases constitutes an event of default that accelerated the following obligations under those certain credit agreements (the "Credit Agreements"):
· approximately
First Lien Credit Agreement," dated as ofJuly 1, 2016 , withBank of America, N.A ., as administrative agent and collateral agent, and the lenders party thereto, as subsequently amended (the "First Lien Credit Agreement"); and
· approximately
Credit Agreement," dated as ofJuly 1, 2016 , withWilmington Trust, National Association , as administrative agent and collateral agent and the lenders party thereto, as subsequently amended.
The Credit Agreements provide that, as a result of the Chapter 11 Cases, the principal and interest due thereunder shall be immediately due and payable. Any efforts to enforce such payment obligations under the Credit Agreements are automatically stayed as a result of the Chapter 11 Cases, and the creditors' rights of enforcement in respect of the Credit Agreements are subject to the applicable provisions of the Bankruptcy Code.
Item 7.01. Regulation FD Disclosure.
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The information contained in this Item 7.01, including in Exhibit 99.2, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company's filings under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing.
Item 8.01. Other Events.
Debtor-in-Possession Credit Agreement
The RSA, in addition to the Sale Transactions, also contemplates that the
Company and the wholly-owned domestic subsidiaries of the Company, as
guarantors, will enter into: a Super-Priority Secured Debtor-in-Possession
Credit Agreement (the "DIP Credit Agreement") with
The DIP Facility is subject to approval by the
If the Debtors' entry into the DIP Credit Agreement is approved by the
Borrowings under the DIP Facility would be senior secured obligations of the Company, secured by a super priority lien on the collateral securing the Debtors' obligations under the DIP Credit Agreement, as well as the unencumbered assets of the Debtors. The DIP Credit Agreement includes various customary covenants, including a covenant mandating compliance with a 13-week budget (subject to permitted variances), variance testing with respect to disbursements and receipts forecast in the 13-week budget and reporting requirements related to the Chapter 11 Cases, among others.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1 Asset Purchase Agreement by and amongGainline Galaxy Holdings LLC ,Sequential Brands Group, Inc. and the other sellers party thereto 2.2 Asset Purchase Agreement by and amongCentric Brands LLC and Joe'sHoldings LLC 99.1 List of Filing Subsidiaries 99.2 Press Release, datedAugust 31, 2021 99.3 Restructuring Support Agreement
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