Following its unexpected business slump last December, American fashion retailer Tailored Brands had sought an emergency loan of US $ 75 million in early March.
Also Read: Tailored Brands seeks US $ 75 million loan after exiting bankruptcy
And now US Federal Court has approved the deal that infuses US $ 75 million emergency loan into the retailer and provides over US $ 3 million to buy out minority stake in the retailer held by unsecured creditors who received shares in Tailored Brand’s Chapter 11 revamping.
As per reports, the Court said that there was no evidence that suggested that the deal’s intent may have been to push away the minority shareholder group.
The deal, reportedly, gives the lender (Silver Point Capital) convertible notes that would dilute stocks’ worth for the minority shareholders.
The minority shareholders of the retailer are now getting a chance to probe the emergency loan deal that many believe is aimed at deceiving the former.
On Monday (5 April), the Court gave stakeholders 2 weeks to probe further into the issue.
One of the major issues raised against giving loan to the retailer was that it had unanticipated losses in its business and faced possible default on its debt, which could bring the retailer on the brink of filing another Chapter 11 bankruptcy.
However, there are also reports wherein Tailored Brands has told media that it has exceeded its forecasts shared with prospective investors in every week of past 2.5 months.
This apparent contradiction in the retailer’s projections is what is worrying the shareholders. We will get a clear picture in next 2 weeks.
The US apparel retailer was founded in 1973 and is mainly known for its menswear and footwear.
