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NEWS

January 5, 2018
Restructuring of Payless Holdings LLC Selected as Chapter 11 Reorganization of the Year (over US$500M - $1B) by The M&A Advisor

 

The Restructuring of Payless Holdings LLC and its affiliated debtors was announced as winner of the Chapter 11 Reorganization of the Year Award (over US$500M - $1B). The award will be presented at The M&A Advisor’s 12th Annual Turnaround Awards Gala, to be held on March 21, 2018 in Palm Beach, Florida.

Curtis served as counsel to Golden Gate Capital and certain funds managed by Golden Gate Capital, Angel Island Capital Management, Blum Capital Partners, and certain directors and officers of Payless in connection with the Chapter 11 cases of Payless, captioned as In re Payless Holdings LLC, et al. (Case No. 17-42267), in the U.S. Bankruptcy Court for the Eastern District of Missouri.

Payless, which was represented by Kirkland & Ellis LLP, filed for protection under Chapter 11 of the U.S. Bankruptcy Code on April 4, 2017. At the time of filing, Payless operated nearly 4,400 brick-and-mortar stores with nearly 22,000 employees, and had approximately US$870 million of outstanding debt.

Prior to the filing, Curtis successfully represented Angel Island – a prepetition first and second lien term loan lender – in its participation in Payless’ Restructuring Support Agreement, which set forth the conditions and milestones that drove Payless’ successful reorganization. Development of the Restructuring Support Agreement was led by the Ad Hoc Committee of First Lien Term Loan Lenders – a committee comprised of a majority of Payless’ prepetition first and second lien term loan lenders – which was represented by King & Spalding LLP.

Post-filing, Curtis defended Golden Gate and Blum – the prepetition equity holders of Payless Holdings LLC – and the directors and officers against a variety of claims asserted by the Official Committee of Unsecured Creditors of Payless. The Committee was represented by Pachulski Stang Ziehl & Jones LLP. The asserted claims, which totaled approximately US$400 million, were consensually resolved in a global settlement for approximately US$20 million, which also included a general release of Curtis' clients.

Payless’ Chapter 11 Plan of Reorganization, which included the global settlement, was confirmed by the Bankruptcy Court on July 24, 2017, and went into effect on August 10, 2017. Curtis continues to represent its clients with respect to certain post-confirmation matters.

Restructuring and Insolvency Chair Steven J. Reisman led a team including Restructuring and Insolvency Partner Cindi M. Giglio; Restructuring and Insolvency Litigation Partner Theresa A. Foudy; Corporate Partner Evan S. Borenstein; Litigation Partner Peter J. Behmke; Restructuring and Insolvency Counsel James V. Drew; Restructuring and Insolvency Associates Allison J. Arotsky and Kyle J. TumSuden; Corporate Associate Brendan Snowden; and Litigation Associates Edward C. Combs and Benjamin C. Woodruff.

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