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Item 1.03
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Bankruptcy or Receivership.
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As previously disclosed, on July 23, 2020, Mahwah Bergen Retail
Group, Inc. (f/k/a Ascena Retail Group, Inc.) (the “Company”) and certain of its subsidiaries (together with the Company,
the “Debtors”) filed voluntary petitions (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United
States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Eastern District of Virginia (the
“Bankruptcy Court”).
Confirmation of the Plan of Reorganization
On February 25, 2021, the Bankruptcy
Court entered an order (the “Confirmation Order”) confirming the Amended Joint Chapter 11 Plan (Technical Modifications)
of Mahwah Bergen Retail Group, Inc. (f/k/a Ascena Retail Group, Inc.) and Its Debtor Affiliates (the “Plan of Reorganization”).
A copy of the Plan of Reorganization, as confirmed by the Bankruptcy Court, and the Confirmation Order are attached hereto as Exhibits
2.1 and 99.1, respectively, and are incorporated herein by reference.
The effective date of the Plan of Reorganization
(the “Effective Date”) will occur as soon as all conditions precedent to the Plan of Reorganization have been satisfied.
The Effective Date is currently expected to occur in March 2021; however, the Company can make no assurances as to when, or ultimately
if, the Plan of Reorganization will become effective. It is also possible that amendments could be made to the Plan of Reorganization
prior to the Effective Date in accordance with the Plan of Reorganization and applicable law.
Summary of the Plan of Reorganization
The following is a summary of the material
terms of the Plan of Reorganization, as confirmed by the Bankruptcy Court. This summary is qualified in its entirety by reference
to the Plan of Reorganization. Capitalized terms used but not defined herein shall have the meanings set forth in the Plan of Reorganization.
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Other than the Administrative Claims, DIP ABL Claims, DIP Term Facility Claims, Professional Fee Claims and Priority Tax Claims,
the Claims and Interests in the Debtors have been classified into eight classes, the treatment of which is set forth in Article
III of the Plan of Reorganization. In particular, on the Effective Date, all of the Debtors’ Interests (Class 8), including
the Company’s common stock, will be canceled, released and extinguished without any distribution.
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On and after the Effective Date, the Debtors shall continue in existence as the Reorganized Debtors for the limited purposes
set forth in the Plan of Reorganization, which include winding down the Estates and liquidating any remaining assets, resolving
Disputed Claims, paying Allowed Claims as provided thereunder, and otherwise administering the Plan of Reorganization.
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As of the Effective Date, the Plan Administrator or a representative thereof shall act as the sole manager and officer, as
applicable, of the Reorganized Debtors. The powers of the Plan Administrator include any and all powers and authority to implement
the Plan of Reorganization and to make distributions thereunder and wind down the businesses and affairs of the Reorganized Debtors.
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All indemnification provisions in place as of the Effective Date (whether in the bylaws, certificates of incorporation or formation,
limited liability company agreements, other organizational documents, board resolutions, indemnification agreements, employment
contracts or otherwise) for current and former directors, officers, managers, employees, attorneys, accountants, investment bankers
and other professionals of the Debtors, as applicable, shall be reinstated and remain intact, irrevocable and shall survive the
Effective Date on terms no less favorable to such current and former directors, officers, managers, employees, attorneys, accountants,
investment bankers and other professionals of the Debtors than the indemnification provisions in place prior to the Effective Date.
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Treatment of the Company’s
Common Stock
As of February 25, 2021, there
were 10,090,162 shares of the Company’s common stock issued and outstanding. Pursuant to the Plan of Reorganization, all
shares of the Company’s common stock outstanding immediately before the Effective Date will be canceled, released and extinguished
without any distribution, and no shares will be reserved for future issuance in respect of claims and interests filed and allowed
under the Plan of Reorganization.
The Plan of Reorganization, as confirmed
by the Bankruptcy Court, provides that the holders of the Company’s common stock will not receive any distribution on account
of their equity interests. The Company’s common stock may continue to be quoted on the OTC Markets Group Inc.’s Pink
Open Market (the “OTC Pink Market”), but under the terms of the Plan of Reorganization, the Company’s common
stock has no underlying asset value and the Company’s stockholders should not view the trading activity of the common stock
on the OTC Pink Market or any other market or trading platform as indicating that there is any prospect that the Company’s
stockholders might realize any value from their common stock on the Effective Date pursuant to the Plan of Reorganization.
Assets and Liabilities
Information regarding the assets and
liabilities of the Company as of the most recent practicable date is hereby incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended October 31, 2020 (the “Form 10-Q”), filed with the Securities and Exchange Commission (the “SEC”) on March 3, 2021. As set forth in the Form 10-Q, as
of October 31, 2020, the Company had total assets of $2,141.9 million and total liabilities of $3,059.1 million (including
$2,097.6 million of liabilities subject to compromise). On December 23, 2020, pursuant to the “363 Sale” described
in the Company’s Current
Report on Form 8-K filed with the SEC on December 23, 2020, the Company sold substantially all of its remaining operating
assets. The Company currently has no revenue-producing operations and its sole operations consist of expenses associated with
the completion of the Chapter 11 Cases and the winding down the Company’s operations after the end of the Chapter 11 Cases.
Additional Information on the
Chapter 11 Cases
Court filings and information about
the Chapter 11 Cases can be found at a website maintained by the Debtors’ claim agent, Prime Clerk, at https://cases.primeclerk.com/ascena/.