At a hearing on March 17, 2021, co-counsel Togut, Segal & Segal LLP and Meyer, Suozzi, English & Klein, P.C. obtained confirmation of a chapter 11 plan of liquidation for Rubie’s Costume Company, Inc. and its affiliated debtors, a 65-year old family owned company based in Melville, New York, on a fully consensual basis. Bankruptcy Judge Alan Trust of the United States Bankruptcy Court for the Eastern District of New York called the cases a “remarkable achievement,” and counsel for the creditors’ committee applauded the debtors in working closely and cooperatively to obtain a tremendous result for the estates.
Under the chapter 11 plan, priority and administrative claims will be paid in full in cash and general unsecured creditors are expected to recover as much as 50% on their claims. At the time of filing, the debtors had approximately $28 million in unsecured trade and other payables. As a result of earlier orders entered in the case authorizing the debtors to pay critical vendors and other claims, it is estimated that the return to unsecured creditors, when combined with the current estimated distributions under the chapter 11 plan, will exceed 80%.
The Togut Firm and Meyer Suozzi previously assisted the debtors, the world’s largest designers, manufacturers, and distributors of costumes and related accessories, with selling substantially all of their assets in a section 363 sale following an expedited three-month in-court process. The sale enabled the debtors to satisfy nearly $100 million of secured debt, have the purchaser assume approximately $35 million in postpetition trade payables, and save hundreds of jobs.