Create an Account

Deluxe Entertainment Restructuring Support Agreement

17 septiembre 2021

The ultra-fast prepack attracted the most attention in chapters 11 of 2019 of FullBeauty and Sungard, which emerged from bankruptcy in 24 hours and 19 hours respectively. FullBeauty is a direct-to-consumer retailer in the Plus Size apparel market. The pre-competition capital structure consisted of an asset-based credit facility totalling approximately $144 million, including an initial tranche of $75 million; a loan with a first right of pledge of approximately $782 million; and a second pawnshop of $345 million. The first and second pawnshops agreed to accept a combination of new temporary loans and reorganized equity as part of a restructuring that resulted in, among other things, a $35 million injection and a total reduction of $900 million in existing secured debt. All other classes, including general unsecured receivables, were not affected (fully paid). The restructuring aid agreement was signed by 99% of the first pledge holders and 95% of the second pledge holders. In the end, 100% of voters accepted the plan. «This is an important milestone for Deluxe – we have a strengthened balance sheet and new capital to continue our investments in services and technology. Deluxe will be in its strongest financial position in more than a decade and will have the resources to lead the industry into the future,» said John Wallace, Chief Executive Officer of Deluxe. «We are incredibly grateful for the continued support we have received in recent months from our employees, customers, suppliers and other business partners, and we are very pleased to have accomplished what we had planned at the beginning of the refinancing process.» Despite all this global unpredictability, in recent weeks alone, it is clear that private lending restructuring will continue to grow in 2020 and that the fault lines that private lenders navigated in 2019 will widen.

Once the restructuring is complete, the company`s lenders will have control of the company, which includes post-production companies EFILM, Company 3 and Encore, as well as vfX house Method. Deluxe Entertainment Services Group, the Hollywood production services provider backed by billionaire Ron Perelman, says it has obtained judicial approval for its prefabricated Chapter 11 reorganization plan. The company is now considering completing its restructuring and exiting the insolvency referred to in Chapter 11. Sears` bankruptcy summarized the risks to secured lenders if they did not receive a Section 506(c) waiver if they had the opportunity. While the expenses related to an insolvency case are not paid out of the proceeds of the security in the absence of an explicit agreement to the contrary, the debtor may, if it uses unbited cash to hold or sell encumbered assets, attempt to «weigh» on the secured creditor in accordance with section 506(c) of the Bankruptcy Act. In order to avoid this result, a secured creditor should require, at the outset of insolvency proceedings, that a debtor waive the right to request a supplement pursuant to section 506(c), in exchange for its consent, to allow the debtor to use cash collateral and/or provide PID financing. .

Back to Top