Nine West Holdings has announced that it, together with certain of its affiliates, has filed an amended chapter 11 plan of reorganization and related disclosure statement with the United States Bankruptcy Court for the Southern District of New York.
The plan is accompanied by an amended and restated Restructuring Support Agreement, which has been signed by parties that hold or control over 85 percent of its secured term debt, over 80 percent of its unsecured term debt, and the company’s indirect equity owners.
“Following the successful sale of our Nine West and Bandolino footwear and handbag business, this filing of the amended plan and entry into the amended Restructuring Support Agreement is another important milestone in our work to right-size the company’s capital structure and to position our One Jeanswear Group, The Jewelry Group, Kasper Group, and Anne Klein businesses for continued long-term success,” said Ralph Schipani, Interim Chief Executive Officer of Nine West Holdings, Inc.
Schipani added, “We look forward to working closely with all stakeholders over the coming weeks and months as we move through the plan approval process.”
The proposed plan is the result of the company’s engagement with its creditors over many months on the proper path forward for the company’s businesses and other assets. The plan reduces the company’s pre-bankruptcy debt obligations by more than US$ 1 billion. The plan further provides significant near-term cash recoveries to stakeholders through the settlement of potential claims and causes of action against the company’s indirect equity owners that have been at the center of creditor investigations during the company’s bankruptcy cases. These claims will be settled for a US$ 105 million cash contribution by the indirect equity owners to the company, which cash will be distributed to the company’s unsecured creditors. The company also will receive a 3-year purchase commitment from Belk, Inc. for an assortment of merchandise across the company’s businesses, further strengthening the company’s operations.
The proposed plan contemplates the following creditor recoveries:
– The company’s secured term debt holders will be repaid in full in cash;
– The company’s unsecured term debt holders will receive (i) 92.5 percent of the equity of the reorganized company, subject to certain adjustments and dilutions set forth in the Plan, and (ii) one-third of the equity holder settlement proceeds;
– The company’s unsecured noteholders and general unsecured creditors will share in an equity pool of 7.5 percent of the equity of the reorganized company, subject to dilution and certain adjustments set forth in the plan; and
– The company’s unsecured noteholders and other unsecured creditors at Nine West Holdings, Inc. will also receive (i) warrants for 20 percent of the reorganized company’s equity, and (ii) two-thirds of the equity holder settlement proceeds.
A hearing has been scheduled for November 7, 2018, to consider approval of the Disclosure Statement related to the plan. Following Court approval of the Disclosure Statement, the company will distribute the Plan and Disclosure Statement to voting creditors for their consideration. The plan remains subject to bankruptcy court approval and customary closing conditions.