Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Bankruptcy newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (April 13, 2020, 7:20 PM EDT ) Premium jeans retailer True Religion Apparel filed papers in Delaware bankruptcy court Monday, less than three years after its last appearance, saying that coronavirus-related retail closures on top of preexisting liquidity issues had tipped it back into Chapter 11.
In court papers filed Monday, the Los Angeles-based company said the pandemic-related closure of all its retail locations and all the stores of its wholesale buyers had accelerated "existing liquidity constraints" and left it no choice but to furlough all nonessential employees and reenter Chapter 11.
"While the debtors would have preferred to wait out the current instabilities of the financial markets and retail industry generally, they simply could not afford to do so," it said.
True Religion said in its bankruptcy filings it has just over 1,000 employees, 92% of them currently furloughed. The company's Chapter 11 petition listed between $100 and $500 million in liabilities.
Representatives for the company did not immediately respond to requests for comment late Monday.
The company, founded in 2002, previously entered bankruptcy in July 2017, saying its revenues peaked in 2013 and that layoffs and store closings had failed to stem losses caused by customers' migration to online shopping. At the time, it said it had 1,700 employees in 128 stores in the U.S. and Canada.
Three months later True Religion won approval for a plan to slash $350 million of its nearly $500 million in debt, mostly through a swap of debt for equity and new loans. It said at the time it planned to go forward with a global e-commerce expansion and targeted campaigns to increase its brand awareness and licensing.
True Religion is represented by Justin R. Alberto, Seth Van Aalten and Michael Trentin of Cole Schotz PC and Arik Preis and Kevin M. Eide of Akin Gump Strauss Hauer & Feld LLP.
The case is In re: True Religion Apparel Inc. et. al., case number 20-10941 in the U..S. Bankruptcy Court for the District of Delaware.
--Additional reporting by Jeff Montgomery. Editing by Alanna Weissman.
For a reprint of this article, please contact reprints@law360.com.
