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Wet Seal Plan Effective

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According to the U.S. Bankruptcy Court docket, Wet Seal’s First Amended Joint Plan of Liquidation became effective, and the Company emerged from Chapter 11 protection. The Court confirmed the Plan on October 30, 2015. Listed below is a detailed summary of the Plan:

Summary of the First Amended Plan of Liquidation

The Plan is a Liquidation Plan. Substantially all of the Company’s operating assets were sold to Mador Lending, LLC, an affiliate of Versa Capital Management, LLC. The new company, known as The Wet Seal, LLC will maintain its headquarters in Foothill Ranch, CA and continue operating its 173 stores and growing its online platform. The Company’s operations will be supported by a new $15 million senior credit facility provided by Crystal Financial LLC. The following will occur under the Liquidation Plan:

  1. All Prepetition Credit Agreement Claims, Secured Claims, Priority Claims, and Assumed General Unsecured Claims will be paid or otherwise satisfied in full.
  1. All Allowed L/C Facility Claims, Assumed Non-Ordinary Course Administrative Claims, Non-Assumed Non-Ordinary Course Administrative Claims, Assumed Ordinary Course Administrative Claims, Priority Tax Claims, Prepetition Credit Agreement Claims, Secured Claims, Priority Claims, and Assumed General Unsecured Claims will be paid or otherwise satisfied in full as required by the Bankruptcy Code, unless otherwise agreed to by the Holders of such Claims and the Liquidation Trustee or Buyer, as applicable.
  1. Subordinated Claims shall not be entitled to, and shall not receive or retain any property or interest in property under the Plan.
  1. Equity Interests of any kind shall be deemed void, cancelled.

Plan Treatment Summary for Claims

wet seal summary

Footnotes 

  1. Liquidation Trusts Interests – The non-transferable interests in the Liquidation Trust that are issued to Liquidation Trust Beneficiaries pursuant to the Plan.
  1. Multi-Debtor Consolidated Claims – Any Claim, or portion thereof, as to which two or more Debtors are co-liable as a legal or contractual matter, including, without limitation, based on principles of joint or several liability or based upon contractual guarantees.

Plan Summary Sources:  Debtor’s First Amended Joint Plan of Liquidation and Disclosure Statement, dated August 10, 2015; company website, news releases and SEC filings.

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