Sequential Brands Group, together with its wholly-owned subsidiaries, commenced voluntary Chapter 11 proceedings in the U.S. Bankruptcy Court for the District of Delaware.
The company determined that, as a result of the significant debt on its corporate balance sheet, it was no longer able to operate its portfolio of brands. Accordingly, in conjunction with the filing, the company will pursue the sale of all or substantially all of its assets under Section 363 of the U.S. Bankruptcy Code. The company will seek approval from the court of auction and bidding procedures that are designed to maximize the value of the company’s assets through an open process that enables interested buyers to submit a bid or bids for the company’s assets.
In connection with this in-court process, Sequential will be obtaining $150 million in debtor-in-possession (DIP) financing from its existing term B lenders. The company expects this new financing, together with cash generated from ongoing operations, to provide ample liquidity to support its operations during the sale process. The proposed transactions will be implemented pursuant to the terms of a restructuring support agreement reached between the company and its term B lenders.
Sequential filed customary motions seeking court approval to continue supporting its operations during the court-supervised process, including the continued payment of employee wages and benefits without interruption and other relief measures customary in these circumstances.
Gibson, Dunn & Crutcher and Pachulski Stang Ziehl & Jones are serving as Sequential’s legal counsel. Stifel and its affiliate Miller Buckfire are serving as Sequential’s investment banker.
