New York – February 6, 2018 – Cooley advised fashion retailer Charlotte Russe, a former portfolio company of private equity firm Advent International, on its recent out-of-court restructuring transaction. Partners Seth Van Aalten, Ron Hopkinson and Eric Schwartzman and special counsel David Silverman led the team advising the company.
The transaction reduces the company’s term loan debt by $124 million, lowers annual interest expense by nearly half and extends maturity to December 2022. In exchange, the term lenders will receive 100% of the company’s equity, subject to dilution from a management equity incentive plan.
The transaction is without precedent in retail restructuring. Outside of Chapter 11, no retailer has managed to simultaneously renegotiate with its landlords across a nearly 600 store fleet, retain key management and gain the unanimous support of second lien creditors.
“Today marks an important milestone in Charlotte’s history and we are pleased with the collaborative efforts from all stakeholders that were needed to make this happen,” said Charlotte Ruse CEO Jenny Ming in a statement. “We have accomplished our goals of right-sizing our capital structure and operating expenses and look forward to executing against our long-term vision and strategy.”
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