The bankruptcy plan for Perfumania Holdings Inc., a retailer that sells perfumes and fragrances, has been approved by the court. The announcement came earlier this week. The company made the announcement that the United States Bankruptcy Court for the District of Delaware approved the plan.
The bankruptcy plan, which the company termed is pre-packaged, will allow the company to repay creditors in full under the ordinary course of operations. Their creditors are vendors and suppliers. Aside from this announcement, the company did not issue any further comment about the bankruptcy plan.
Under the Chapter 11 reorganization plan, all common stock of the company will be canceled. In exchange for $2 per share, shareholders will be able to sign a shareholder release form if they so wish. After the company did not make mandatory filings required by the government, the company's stock was removed from the stock market.
Perfumania will become a private company once all of the remaining stock is canceled because trading will be stopped on all exchanges. Government filings show that the executive chairman and his family held 50 percent of the company's stock as of Aug. 29.
The reorganization plan led to the formation of a new entity, known as NewHoldCo, which involves the executive chairman and the second largest shareholder. The new entity promised to invest $14.3 million in the company using the new entity. Once reorganization is complete, NewHoldCo would own 100 percent of the company.
Filing for Chapter 11 bankruptcy in New Hampshire is a valid way for companies to restructure their organization and find a way out of debt. Consulting with an experienced bankruptcy attorney can make navigating the process much easier for all involved.
Source: Newsday, "Perfumania’s Chapter 11 bankruptcy plan approved by court," Oct. 09, 2017