Orchard Brands

Summary

Financial Advisor

Appleseed’s Intermediate Holdings (AIH) is a direct marketer of women’s and men’s apparel as well as home and lifestyle goods with a focus on the over-55 population. The company markets its brands through catalogs, outlet stores, and the Internet in the U.S.

CMA was engaged to serve as the financial advisor for the Official Committee of Unsecured Creditors. CMA provided valuable insight to the Committee to ensure that the most appropriate actions were taken to maximize recoveries.

Engagement Highlights

Working with the attorneys, CMAG felt uncomfortable with several items, including a significant dividend to Golden Gate, which was a major factor leading to the company’s filing.
When the case settled with the UCC getting no recovery, CMA was hired by counsel of the newly formed Litigation Committee.
The case pressured Golden Gate to settle, resulting in the unsecured creditors recovery going from zero to $[0.45].
AIH faced an extremely challenging retail environment as adverse economic conditions and increased levels of unemployment led to a sharp decline in consumer spending.
As a result, AIH experienced constrained liquidity and was unable to comply with certain covenants under its credit agreements.
AIH held approximately $725.1 million in pre-petition funded secured and unsecured indebtedness which carried a total annual interest expense of approximately $52 million.
Despite its efforts to adjust to the new retail and consumer environment and improve liquidity by negotiating with lenders, noteholders and vendors, AIH continued to experience a decline in revenues and profitability and was forced to file for Chapter 11 protection in January 2011.
The plan provided no recovery to the holders of general unsecured claims, and, as such, the Committee objected to the plan and evaluated AIH’s options in bankruptcy in order to maximize unsecured creditors’ recoveries.
Company successfully emerged from Chapter 11 via plan of reorganization.

Orchard Brands

Summary

Financial Advisor

Engagement Highlights

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