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Pacific Sunwear of California Bankruptcy Plan Effective

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Pacific Sunwear of California’s Revised Joint Plan of Reorganization became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on September 6, 2016.

As previously reported, “The Plan provides for the issuance of 100% of the new common stock in Reorganized Parent (the ‘New Parent Interests’) to PS Holdings of Delaware – Series A and PS Holdings of Delaware – Series B, in their capacity as Holders of Term Loan Claims (the ‘Term Loan Lenders’), in exchange for a portion of the Term Loan Claims, with the remaining portion of the Term Loan Claims to be converted into a New Term Loan. In addition, the Term Loan Lenders will consummate a minimum of a $20 million investment upon consummation of the Plan to fund ongoing operations, in the form of debt, equity, or a combination of debt and equity.”

Court-filed documents continue, “The Plan provides for the payment in full of all Administrative Claims, Allowed Priority Tax Claims, and Priority Non-Tax Claims, and the satisfaction of all Other Secured Claims, consistent with section 1129 of the Bankruptcy Code. The Plan also provides for the reinstatement of the Mortgage Notes Claims, and for payment in full of Qualified Unsecured Trade Claims, subject to entry into a Qualified Support Agreement. The Plan further provides for a Cash payment to Holders of Allowed General Unsecured Claims of $400,000 to be distributed Pro Rata among Holders of Allowed General Unsecured Claims. The Debtors will into a New ABL Facility to fund ongoing operations and obligations under the Plan, including to pay or re-finance the DIP Facility Claims.”

This specialty retailer filed for Chapter 11 protection on April 7, 2016, listing $252 million in pre-petition assets. Read more retail bankruptcy news.