After filing a voluntary Chapter 11 petition in the U.S. Bankruptcy Court of Delaware, True Religion Jeans secured stakeholder support for a comprehensive financial recapitalization of the company’s capital structure.

In signing a restructuring support agreement with the substantial majority of its term loan lenders and its sponsor, TowerBrook Capital Partners, the company will reduce its debt by more than $350 million and convert it into the substantial majority of the reorganized company’s equity.

The company expects it will take 90 to 120 days to obtain confirmation of its pre-arranged plan by the bankruptcy court. Throughout the implementation of this process, True Religion will continue to operate its business without interruption to customers, employees and business partners.

True Religion has secured post-petition debtor-in-possession (DIP) financing from Citizens Bank for up to $60 million. Once True Religion’s plan is confirmed and it achieves the desired deleveraging of its balance sheet under the Plan, True Religion will have sufficient “exit” funding, also provided by Citizens Bank, in addition to its ongoing cash flow, to finance operations post confirmation.

“After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success,” said John Ermatinger, president and CEO of True Religion. “By dramatically improving our capital structure 24 months in advance of our term loan maturity, we will continue business operations as usual and provide our employees and business partners the long-term stability they need, while providing the necessary flexibility to invest in growing our digital footprint, building connections with customers and improving organizational competencies.”

The plan provides for full payment of claims of True Religion’s continuing trade creditors, which includes continuing vendors, suppliers and landlords.

The company’s legal advisors include Wachtell Lipton Rosen & Katz and Pachulski Stang Ziehl & Jones. The company’s financial advisor is MAEVA Group.