True Religion Reaches Milestone Agreement with Lenders

-Restructuring facilitated through voluntary pre-arranged Chapter 11 filing will reduce debt by over 75% or $350m

-Citizens Bank providing $60m in DIP and exit financing to support operations

-Trade Creditors critical to the business expected to be paid in full

-Company continues to operate business as usual

LOS ANGELES--()--True Religion Brand Jeans is pleased to announce it has secured critical stakeholder support for a comprehensive financial recapitalization of the Company’s capital structure. In signing a Restructuring Support Agreement (“RSA”) with the substantial majority of its Term Loan Lenders and its Sponsor, TowerBrook Capital Partners, the Company will reduce its debt by over $350 million and convert it into the substantial majority of the reorganized Company’s equity. To implement the terms of the pre-arranged restructuring expeditiously, the Company filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware, and expects it will take 90 to 120 days to obtain confirmation of its pre-arranged plan by the Bankruptcy Court. Throughout the implementation of this process, True Religion will continue to operate its business without interruption to customers, employees and business partners.

After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success,” said John Ermatinger, President and CEO of True Religion. “By dramatically improving our capital structure 24 months in advance of our term loan maturity, we will continue business operations as usual and provide our employees and business partners the long-term stability they need, while providing the necessary flexibility to invest in growing our digital footprint, building connections with customers, and improving organizational competencies. I want to recognize our lender community, our private equity owner, TowerBrook Capital Partners, and our financial and legal advisors for negotiating a constructive outcome for the company. Importantly, I want to thank our dedicated employees for remaining focused on the business, and our loyal customers and valued business partners for their support throughout this process.”

Ermatinger continued, “I am also proud to announce that year to date adjusted EBITDA through May at $7.1 million is up 95% versus last year. This improved performance will allow us to enter into the next phase of our recapitalization process with confidence as we continue to execute against our strategic plan and drive the business forward.”

True Religion has secured post-petition debtor-in-possession (DIP) financing from Citizens Bank N.A. for up to $60m. Once True Religion’s plan is confirmed and it achieves the desired deleveraging of its balance sheet under the Plan, True Religion will have sufficient “exit” funding, also provided by Citizens Bank N.A., in addition to its ongoing cash flow, to finance operations post confirmation.

The Plan provides for full payment of claims of True Religion’s continuing trade creditors, which includes continuing vendors, suppliers and landlords. True Religion has taken additional steps in order to ensure a smooth and orderly transition through the Chapter 11 filing. The Company has filed a motion to honor and pay prepetition purchase orders that were issued prior to the petition date, but which have not yet come due. True Religion has also filed a separate motion to pay certain vendor claims that arose prior to the Petition Date, as well as to pay for goods received within 20 days of the bankruptcy filing.

The company’s legal advisors include Wachtell Lipton Rosen & Katz and Pachulski Stang Ziehl & Jones. The company’s financial advisor is MAEVA Group, LLC.


Since 2002, True Religion has crafted denim that speaks to the uniqueness found in all of us. Sparking individuality with quality fits and unique design details, True Religion recognizes denim as a universal necessity-invariably innovating its fits, washes and distinctive stitch, to deliver jeans entirely different from the norm. The brand also presents vintage inspired knits, graphic tees and activewear.


True Religion
Liz Gemmill

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Release Summary

True Religion Reaches Milestone Agreement with Lenders

True Religion Brand Jeans