A’GACI, LLC – Files Chapter 11 for the Second Time in Just Over a Year, Will Begin Shutting All 54 Bricks and Mortar Stores Immediately

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August 7, 2019 − A’GACI, LLC (“A’GACI” or the “Debtor”) filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Western District of Texas, lead case number 19-51919. The Debtor, a fashion retailer catering to young women, is represented by Eric Terry of Eric Terry Law PLLC. Further board-authorized engagements include (i) Sierra Constellation Partners as financial adviors and (ii) Prime Clerk as claims agent. 

This is the second Chapter 11 filing for this Debtor in just over 12 months; the Debtor having previously filed in the Western District of Texas (case 18-50049) on January 1, 2018 and emerged on August 3, 2018.

The Debtor's petition notes between 5,000 and 10,000 creditors; estimated assets between $10.0mn and $50.0mn; and estimated liabilities between $50.0mn and $100.0mn. Documents filed with the Court list the Debtor's five largest unsecured creditors as (i) Simon PropertyGroup (TX), LP  ($546k lease claim), (ii) SSG Advisors LLC  ($353k professional services claim) and (iii) Kurtzman Carson Consultants LLC ($333k professional services claim), (iv) Haynes & Boone,LLP ($316k professional services claim) and (v) Chocolate U.S.A ($276 trade debt). Each of SSG Advisors, Kurtzman Carson, and Haynes and Boone were engaged by the Debtor as advisors in respect of the 2018 bankruptcy.

In a court filing requesting authority to begin closing its stores [Docket No. 4], the Debtor stated "The Debtor has faced a challenging business environment brought on by a shift in consumer preferences away from shopping at brick and mortar stores to online retail channels, hurricanes that impacted its most profitable stores, and difficulties with the implementation of an inventory management system. These factors have left the Debtor with a significant number of stores operating at sub-optimal performance levels. The Debtor’s management team, in the exercise of their sound business judgment and in consultation with their advisors ultimately determined that it is appropriate to initially close and wind down all of its brick and mortar store locations."

A list of the 54 stores and 1 distribution center covered by the store closing motion is attached at Exhibit 1a to Schedule 1 (which is the consulting agreement).

Store Closing Arrangements

The Debtor is requesting Court authority to enter into a consulting agreement with a contractual joint venture comprised of SB360 Capital Partners, LLC and Hilco Merchant Resources, LLC (together, the “Consultant”) further to which the Consultant will immediately begin a store closing process in respect of all of the Debtor's bricks and mortar stores; a process which is expected to be completed by the end of August.

A list of the 54 stores and 1 distribution center covered by the store closing motion is attached at Exhibit 1a to Schedule 1 (which is the consulting agreement).

The Debtor's online sales channel has already ceased operations.

Debtor-in-Possession (“DIP”) Financing

The Debtor is seeking approval of a $10.0mn senior secured asset-based loan provided by certain of its prepetition lenders.

About the Debtor

Founded in San Antonio, TX, A'GACI is a lifestyle brand catering to "young fashion lovers who are sexy, feminine and confident in their style."  

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