Togut, Segal & Segal LLP is pleased to announce that at the Global M&A Networks 13th Annual Americas M&A Atlas Awards, Rubie’s Costume Company, Inc. and its U.S. based affiliates in their Chapter 11 cases were named as the 2021 Restructuring of the Year – Middle Markets. The Togut Firm acted as co-counsel to the Debtors along with Meyer, Suozzi, English & Klein, P.C. Global M&A Networks honors the best value-creating deals, outstanding firms, illustrious deal makers, and legendary leaders from global business, investors, and deals communities. Winners of the Global M&A Networks awards are selected based on “deal criteria” and expertise.
Rubie’s and its affiliated debtors, together a 65-year-old family-owned company based in Melville, New York, are the world’s largest designers, manufacturers, and distributor of costumes and related accessories. Among other things, the Togut Firm worked with the Debtors’ other professionals to sell substantially all of the Debtors’ assets in a section 363 going concern sale. 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 maintain hundreds of jobs.
Following the sale, the United States Bankruptcy Court for the Eastern District of New York confirmed a fully consensual chapter 11 plan of liquidation. Under the chapter 11 plan, priority and administrative claims were paid in full and general unsecured creditors received 41% on their claims. At the time of filing, the Debtors had approximately $28 million in unsecured trade and other payables. As a result of orders entered in the early stages of the cases authorizing the debtors to pay critical vendors and other claims, and therefore the return to unsecured creditors, when combined with the distributions under the chapter 11 plan, were approximately 75%.
Chief Bankruptcy Judge Alan Trust of the Bankruptcy Court for the Eastern District of New York called the outcome a “remarkable achievement,” and counsel for the creditors’ committee applauded the debtors and their professionals in working closely and cooperatively to obtain a tremendous result for the estates.