In the past, the premium denim brand True Religion was so in demand that counterfeiters attempted to knock them off. However, the tide has changed for the company, which recently decided to file for Chapter 11 bankruptcy. Any companies in Massachusetts that are struggling to make ends meet may likewise benefit from filing for this type of bankruptcy protection.
According to the clothing company, it has outstanding debt totaling $483 million. As part of its restructuring support agreement with its lenders, True Religion stated that it plans to decrease its debt by a whopping $350 million via converting its loans into equity. Through this strategy, emerging from bankruptcy in just three to four months may be possible, in which case the company can resume its normal operations.
In the meantime, the company will be able to continue operating with no interruption thanks to a Citizens Bank loan for up to a total of $60 million. The company currently has more than 620 full-time workers. It also has more than 1,000 part-time workers.
True Religion is one of many retail and clothing companies that are facing financial difficulties as more shoppers turn to the internet rather than to the malls to make purchases. However, companies in a wide range of industries in Massachusetts can easily stumble upon hard financial times for a number of reasons, such as a fledgling economy. In these situations, filing for Chapter 11 bankruptcy may be immensely helpful for reorganizing debt and, thus, help business owners get the fresh financial starts they need to succeed in the business world.
Source: apparelnews.net, “True Religion Files for Chapter 11 Bankruptcy Protection“, Deborah Belgum, July 5, 2017