Bankruptcy News

We've summarized the latest docket activity and news for publicly traded companies currently operating under U.S. Bankruptcy Court protection.

Bankruptcy/Chapter 11

rue21 Chapter 11 Petition Filed

rue21 and three affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Western District of Pennsylvania, lead case number 17-22045. The Company, which retails specialty teen apparel, is represented by Eric A. Schaffer of Reed Smith. According to the Company, "The restructuring is an important step forward in rue21's ongoing business transformation into a more focused and highly performing retailer." Last month, rue21 began the process of closing approximately 400 underperforming stores in its 1,179 store fleet, and the Company may evaluate additional store closings as it continues to manage its real estate lease portfolio. In conjunction with the Chapter 11 restructuring, rue21 has entered into a restructuring support agreement (RSA) with lenders holding 96.8% of the Company's secured term loan, bondholders representing 60.2% of the Company's issued and outstanding unsecured notes, and the Company's majority shareholder. rue21 has also reached agreements, subject to Court approval, to obtain up to $125 million in ABL debtor-in-possession financing from its existing ABL lenders and up to $50 million in new money term loan debtor-in-possession financing from a subset of its existing term loan lenders. This financing is intended to provide the Company with the liquidity necessary to support its ongoing business operations during the financial restructuring process. Melanie Cox, C.E.O. of rue21, comments, "These actions are being undertaken with the goal of strengthening the Company's balance sheet, achieving a more efficient cost structure, and concentrating resources on a tighter retail footprint in order to pave the best path forward for rue21. Even in a challenging environment, we are fortunate that rue21 has highly relevant brands, an enthusiastic and loyal customer base, and hundreds of highly performing stores."

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