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

Perfumania Holdings Chapter 11 Petition, Plan Filed

Perfumania Holdings and 18 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 17-11794 (Model Reorg Acquisition). Subsidiaries Parlux and Five Star Fragrance are not included in the Chapter 11 filings. The Company, which is a wholesale distributor and specialty retailer of perfumes and fragrances, is represented by Anthony W. Clark of Skadden, Arps, Slate, Meagher & Flom. According to a corporate release, the filing was initiated in order to "reduce its retail store count to better align with current consumer shopping patterns, increase investments in its e-commerce business, and become a privately-held Company." Concurrent with the Chapter 11 petition, Perfumania Holdings also filed a Prepackaged Joint Chapter 11 Plan of Reorganization and related Disclosure Statement. Under the Plan, it is anticipated that current equity of Perfumania Holdings will be cancelled; however, current shareholders will be given the opportunity to receive consideration of $2.00 per share in exchange for completing a shareholder release form. The Plan also provides for an equity infusion that will be used to make (1) distributions under the Plan; (2) to fund the consideration being paid to shareholders who submit a shareholder release form and (3) to fund ongoing operations. Perfumania Holdings notes that the Company has ample liquidity to fund operations and has received a commitment for up to approximately $84 million in debtor-in-possession financing from its existing lender, Wells Fargo, which is expected to be replaced by a $100 million exit facility upon emergence. The exit facility will, in combination with the equity infusion noted above, provide the Company with additional liquidity support. Michael Katz, Perfumania Holdings' president and C.E.O., comments, "This process will allow us to more quickly adapt to the shift in consumer shopping habits by focusing more of our resources on implementing our e-commerce strategy, making Perfumania a stronger and more competitive company."

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