WILMINGTON, DE — The LYCRA Company, LLC announced it has filed a voluntary prepackaged Chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the Southern District of Texas as part of a restructuring plan to eliminate approximately $1.2 billion in long-term debt and establish a new capital structure, the company said.
The filing follows a restructuring support agreement with a majority of the company’s creditors, including holders of its senior secured term loan, 16.000% Senior Secured Notes and 7.500% Senior Secured Notes, who have agreed to support the prepackaged plan of reorganization.
The company said the plan is expected to allow it to complete the restructuring process and emerge from Chapter 11 within about 45 days, citing broad creditor support.
As part of the restructuring, LYCRA has secured commitments for $75 million in debtor-in-possession financing to support operations during the bankruptcy process, along with more than $75 million in exit financing intended to refinance the interim funding upon emergence.
The company said it will seek court approval to continue paying vendors and suppliers in full in the ordinary course of business while the case proceeds.
Certain entities within The LYCRA Company are not included in the Chapter 11 filing, according to the company.
Chief Executive Officer Gary Smith said the restructuring is intended to reduce debt and strengthen the company’s financial position, stating the company is taking “decisive action to meaningfully reduce our debt and strengthen our financial foundation.”
Additional information and court filings related to the case are available at https://restructuring.ra.kroll.com/lycra. The company’s claims agent, Kroll Inc., can be reached at (888) 498-1399 or (347) 338-6514 for inquiries related to the restructuring process.
The LYCRA Company said it is being advised by Linklaters LLP and Haynes Boone, LLP as legal counsel, Houlihan Lokey as investment banker, and FTI Consulting as financial and communications advisor.
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