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LRI Holdings RSA Approved

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The U.S. Bankruptcy Court approved LRI Holdings’ motion to assume a restructuring support agreement.

As previously reported, “Pursuant to the Restructuring Support Agreement, the Supporting Parties have agreed to support a restructuring transaction that will accomplish the goal of materially deleveraging the Debtors’ balance sheet and provide much needed liquidity to the Debtors’ business. At the same time, the Restructuring Support Agreement facilitates financing to provide a stable financial foundation on which the Debtors can implement an operational restructuring to allow the business to stem losses and return to financial success.”

Court-filed documents continue, “With the support of all of the Revolving Facility Lenders and holders of 83.9% of the approximately $378.0 million in principal amount of Notes, the Restructuring Support Agreement binds the Supporting Parties to a series of transactions, including committed exit financing, that will deleverage the company by over $300 million. Importantly, the Restructuring Support Agreement has backstop commitments from the Supporting Noteholders to backstop the funding of the ‘new money’ portion of the debtor in possession financing facilities (the ‘DIP Facilities’), which will be junior to the obligations of the Credit Agreement, for the lenders under the DIP Facilities to roll-over that facility to an exit facility upon emergence from chapter 11, and for the Supporting Lenders to backstop an exit facility that will take-out the existing obligations under the Credit Agreement at closing.”

In addition, “Thus, the prompt assumption of the Restructuring Support Agreement is critical to the Debtors’ success in completing their contemplated restructuring and expeditiously emerging from chapter 11 to the benefit of the Debtors’ creditors and their estates.”

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