Tailored Brands (Men’s Warehouse, Moores) does Chapter 11

As predicted earlier, Tailored Brands filed Chapter 11 today. Another retailer bites the dust.

This is not surprising, but when reading the fine print (8-K):

The RSA contemplates a restructuring process that will establish a financially sustainable operating company (“Reorganized Tailored”). The contemplated restructuring process includes (i) the commencement by the Debtors of voluntary cases under chapter 11 of the Bankruptcy Code, (ii) the acquisition of the DIP ABL Facility (as defined below) from the Debtors’ current ABL lenders, (iii) the Consenting Term Loan Lenders agreeing to compromise their prepetition claims in exchange for, among other things, exit debt and 100% of the new common stock of Reorganized Tailored; (iv) the Consenting Term Loan Lenders agreeing to the consensual use of cash collateral; and (v) the implementation of exit financing for Reorganized Tailored (which is described below), each on the terms set forth in the RSA.

The first-lien debt holders will get 100% of the common stock of the reformed entity. The senior bondholders will receive nothing unless if they are thrown a few last second bones (warrants to buy common?) to expedite the restructuring. They last traded at 3 cents on the dollar today.