Tailored Brands (Men's Wearhouse et al.)
The firm was counsel to the creditors’ committee in the chapter 11 case of Tailored Brands. The parent company of menswear chains Jos A. Bank and Men's Wearhouse filed for chapter 11 bankruptcy protection with an equity swap plan in hand to cut $630,000,000 in debt during the coronavirus pandemic. In November 2020, bankruptcy court approved a plan to transfer ownership to lenders, with unsecured creditors receiving 7.5% of the reorganized equity in Tailored Brands as well as warrants to buy additional stock. The equity payout was more than five times higher than what was initially offered to the unsecured creditors. The firm successfully argued that the entity was more valuable than the debtors and lenders originally indicated and therefore 1) preserved the going concern (including hundreds of locations and thousands of jobs) and 2) provided a return to unsecured creditors. Importantly, Tailored Brands included international (Canadian and Cayman) entities. The firm determined that the Cayman entity was solvent as of the filing, and orchestrated an intercommittee settlement in which creditors of that entity received increased value, successfully obtaining unity amongst the entire creditor body—including those with disparate interests. The debtor emerged from bankruptcy in December 2020 after eliminating $686,000,000 of debt.
