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Nine West says cred talks 'have intensified' as it seeks plan deal


According to Market Intelligence, December 2022


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Nine West says cred talks 'have intensified' as it seeks plan deal

Nine West Holdings Inc. has asked the bankruptcy court overseeing its Chapter 11 proceedings to extend its exclusive periods to file and solicit acceptances to a reorganization plan by 45 days, through Oct. 29 and Dec. 28, respectively, saying the extension would permit the company to continue its discussions with key stakeholders toward a global resolution of the company's reorganization.

According to a motion filed by the company Aug. 31, the key stakeholders with which the company has been engaged and is seeking to continue negotiations include the unsecured creditors' committee, an ad hoc group of secured creditors, an ad hoc group of crossover creditors, a newly formed ad hoc group of 2019 noteholders and key creditor Brigade Capital Management.

These parties "are continuing their investigations and diligence efforts" in the case, but at the same time discussions on a global resolution "have intensified" since the company was granted an initial exclusivity extension Aug. 9, "in no small part due to the [company's] consensus-building efforts," according to the motion.

Nine West has also postponed the hearing on the adequacy of its proposed disclosure statement, which had been set for Sept. 14, to a "date to be determined."

The company filed its reorganization plan and disclosure statement April 20. Under the plan and related restructuring-support agreement, which is backed by parties that hold or control more than 78% of its secured term debt and more than 89% of its unsecured term debt, the company's secured term loan creditors are to be paid in full, in cash, while unsecured term loan lenders are to receive new second-lien debt and 100% of the new equity in the reorganized company.

Holders of claims under the company's 2034 notes and 2019 notes, along with general unsecured claims, would receive the value of the company's unencumbered property in either new equity — which would dilute the equity distributed to unsecured term loan holders — cash or other consideration on a pro rata basis.

That said, in early June the Manhattan bankruptcy court authorized the official creditors' committee in the case to obtain discovery from the company, its equity sponsor Sycamore Partners Management, and various banks and financial advisers in connection with the panel’s allegations that there may be potential estate claims in the case arising from the company's 2014 leveraged buyout.