This time Fitch was right. One month ago the rating agency listed 8 retail names that were most likely to file for bankruptcy next, just over a month later 1 out of the 8 was down, when teen clothing retailer Rue21 filed a prepackaged bankruptcy on Monday night in Pennsylvania bankruptcy court.
In its bankruptcy petition, the company which retained Kirkland & Ellis as legal advisor, Rothschild as financial advisor, and Berkeley Research as its restructuring advisor, listed both assets and liabilities in the range of $1 to $10 billion.
The restructuring process, during which the company will operate as normal, will lead to company’s “transformation into a more focused and highly performing retailer” the company announced in a press release, and added that as part of its restructuring process, it had “entered into a Restructuring Support Agreement (RSA) with certain of its stakeholders that confirms the support of the Debtors’ key constituents for the Debtors’ restructuring process and contemplates, among other things, an emergence from chapter 11 proceedings in the fall of 2017 with a significantly deleveraged balance sheet. In particular, 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 each executed the Restructuring Support Agreement.”
This post was published at Zero Hedge on May 16, 2017.