Lucky Brand initiated proceedings under Chapter 11Christian Fernsby ▼ | July 5, 2020
Lucky Brand Dungarees, LLC announced that it has entered into a stalking horse asset purchase agreement with SPARC Group LLC for the sale of substantially all of the Company's operating assets.
Chapter 11 Lucky Brand Dungarees
Topics: Lucky Brand Chapter 11
In addition to entering into the asset purchase agreement with SPARC, the Company and certain of its affiliates also entered into a "back-up" asset purchase agreement for the sale of the Company's and such affiliates' intellectual property and certain other assets to ABG-Lucky LLC which will only come into effect if the asset purchase agreement with SPARC terminates under certain circumstances.
To facilitate the sale and reduce its debt burden caused by recent challenges, including the coronavirus pandemic, Lucky Brand has initiated proceedings under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware.
Lucky Brand has received new financing commitments from certain of its existing lenders that will provide sufficient liquidity to fund the business through the closing of the sale.
Lucky Brand will be operating its business in the ordinary course during the Chapter 11 process, and the vast majority of its stores, e-commerce platform, and wholesale business remain open to serve customers.
During Chapter 11, Lucky Brand and its advisors will continue to explore potential sale transactions with other parties to achieve the highest or otherwise best offer for the Company.
Lucky Brand has filed a number of customary motions with the U.S. Bankruptcy Court seeking authorization to support its operations during the process, including the authority to continue payment of employee wages and maintain healthcare benefits. ■