Brooks Brothers, a common name in the legal industry, filed for Chapter 11 Bankruptcy protections last week. Brooks Brothers, which was founded in 1818, has been a common place name in the legal industry and notably has dressed the majority of U.S. Presidents with their suits.
Brooks Brothers was granted in Chapter 11 to fund its reorganization in bankruptcy with an $80 million loan that carries a zero interest rate and no closing fees. ABG-BB LLC, a partnership between Authentic Brands Group LLC and mall landlord Simon Property Group Inc., will provide the loan. The generous terms reflect competition between that group and WHP Global, a brand buying company backed by distressed debt giant Oaktree Capital Management LP.
Lenders who make so-called debtor-in-possession loans often have an advantage when trying to buy a company out of bankruptcy. Such loans almost always carry a higher interest rate than a non-bankrupt company would be charged. Brooks Brothers intends to organize a court-supervised auction in the coming weeks per their attorney.
Retail bankruptcies are accelerating as financial impacts from CV-19 are hitting the industry.
For any questions or assistance, please contact the Bankruptcy Attorneys at Fazzio Law, we are in your corner!
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