John Varvatos Enterprises reached agreements with an affiliate of Lion Capital, one of the company’s existing secured lenders, under which the company will sell its business to Lion as a going concern. To facilitate this transaction, John Varvatos Enterprises and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
“The agreements with Lion represent a critical step in our process to transform our business to drive long-term, sustainable growth,” John Varvatos, founder of John Varvatos Enterprises, said. “We have taken decisive action to respond to the challenges that all retailers face in the present environment and we remain extremely confident that our brand, celebrating its 20th year in business, will emerge even stronger. We have a passionate team, a fierce global consumer following and a commitment to our customers, whom we expect to serve for many years to come.”
The sale to Lion will be subject to approval of the bankruptcy court and may include a court-supervised auction in which other bidders may offer a higher price for John Varvatos Enterprises’ assets. Lion additionally committed to provide, subject to court approval, debtor-in-possession financing, which, when combined with the John Varvatos Enterprises’ projected cash flows, is expected to support operations during the restructuring process.
John Varvatos Enterprises filed a series of customary first day motions with the bankruptcy court, seeking to maintain its operations during the restructuring process to help facilitate a smooth transition into Chapter 11.
John Varvatos Enterprises retained MMG Advisors as investment banker, Morris, Nichols, Arsht & Tunnel as legal counsel and the Clear Thinking Group as restructuring advisor. Sullivan & Cromwell will serve as legal counsel to Lion, the proposed purchaser of the assets.
John Varvatos Enterprises is the owner of luxury menswear brands John Varvatos Collection and John Varvatos Star USA.
