Item 1.03 Bankruptcy
or Receivership.
As
previously reported, on August 2, 2020, Tailored Brands, Inc. (the “Company”) and certain of its subsidiaries (together
with the Company, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of
title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy
Court”). The Chapter 11 Cases are being jointly administered under the caption In re: Tailored Brands, Inc., et
al., Case No. 20-33900 (MI).
Confirmation
of Plan of Reorganization
On November 13,
2020, the Bankruptcy Court held a hearing to consider confirmation of the Fifth Amended Joint Plan of Reorganization for
the Debtors under Chapter 11 of the Bankruptcy Code (as it may be amended, supplemented or otherwise modified, the “Plan”).
On November 13, 2020, the Bankruptcy Court entered an order confirming the Plan (the “Confirmation Order”). Copies
of the Plan and the Confirmation Order are filed as Exhibits 2.1 and 99.1, respectively, to this Current Report on Form 8-K, and
are incorporated by reference herein.
Summary
of Plan of Reorganization
The following
is a summary of the material terms of the Plan. The summary does not purport to be complete and is qualified in its entirety by
reference to the full text of the Plan and the Confirmation Order filed as Exhibit 2.1 and 99.1, respectively, to this Current
Report on Form 8-K (the “8-K”). Capitalized terms used in this 8-K and not otherwise defined will have the meanings
given to them in the Plan and the Confirmation Order. The Plan preserves the Debtors’ business and enhances their value
by substantially deleveraging the Debtors’ balance sheet by $686 million.
The Plan provides
that on the Effective Date, there will be a reorganization of each Debtor and establishes processes for distribution on account
of and resolution of Claims. The Plan reflects the terms of various settlements among the Debtors, the Term Loan Lenders, the
ABL Lenders and the Creditors Committee, which resulted in an agreement on a global restructuring. The Plan further
incorporates a compromise and settlement with the Creditors Committee on behalf of the Holders of General Unsecured Claims, whereby
(i) the Liquidating Trust Equity Recovery will total in the aggregate 7.5% of the New Equity (subject to dilution by the Management
Incentive Plan and the New Warrants) and the New Warrants, (ii) Holders of Allowed Class 5(b) Claims shall have the option
to elect to receive cash equal to $16.05 per share of New Equity instead of their pro rata share of the Liquidating Trust Equity
Recovery, (iii) the Term Loan Lenders have agreed to forgo a distribution on their Term Loan Deficiency Claims, and (iv)
the Debtors have agreed to waive Avoidance Actions (including those against Holders of General Unsecured Claims), which are being
released as of the Effective Date.
The Plan creates
nine classes of claims against and interests in the Debtors. Holders of Allowed Claims or Allowed Interests, as applicable, in
Class 1 (Other Secured Claims), Class 2 (Other Priority Claims), Class 3 (ABL Facility Claims), Class 4 (Term Loan Secured Claims),
Class 5(a) (Moores General Unsecured Claims), Class 5(b) (Other General Unsecured Claims), Class 5(c) (GUC Convenience Claims),
Class 6 (Intercompany Claims), Class 7 (Intercompany Interests), Class 8 (Existing Equity Interests), and Class 9 (Section
510(b) Claims). Under the Plan, each Holder of an Allowed Claim or Allowed Interest, as applicable, will receive the treatment
described therein in full and final satisfaction, settlement, release, and discharge of and in exchange for such Allowed Claim
or Allowed Interest, unless treatment is otherwise specified. Classes 1, 2, 3, 5(a), and 5(c) are unimpaired under the Plan. Each
Holder of Class 4 Claims will receive its Pro Rata share of and interest in the Exit Takeback Term Loan Facility and 92.5% of
the New Equity (subject to dilution by the Management Incentive Plan and the New Warrants). Each Holder of Class 5(b) Claims will
receive, at the option of such Holder, either (a) the Liquidating Trust Equity Recovery or (b) the Cash Option; provided that
the Term Loan Lenders shall not be entitled to any recovery on account of any Term Loan Deficiency Claims, which shall be deemed
waived, extinguished, satisfied, released, and discharged for all purposes on the Effective Date; provided further that if any
Holder of an Allowed Class 5(b) Claims fails to select either the Cash Option or the Liquidating Trust Equity Recovery, such Holder
shall be deemed to receive the Liquidating Trust Equity Recovery. Classes 4 and 5(b) are the only voting classes. Class 4 voted
to approve the Plan and Class 5(b) rejected the plan. The Claims in Class 6, which were deemed to either accept or reject the
Plan, will be, at the option of the Debtors and the Required Consenting Term Loan Lenders, as applicable, setoff, contributed,
distributed, compromised, settled, reinstated, canceled and released without any distribution or otherwise addressed in a manner
determined by the Debtors and the Required Consenting Term Loan Lenders. The Interests in Class 7, which were deemed to either
accept or reject the Plan, will be, at the option of the Debtors and the Required Consenting Term Loan Lenders, as applicable,
contributed, distributed, eliminated via merger or other corporate transaction, reinstated, canceled and released without any
distribution, or otherwise addressed in a manner determined by the Debtors and the Required Consenting Term Loan. Both Class 8
Existing Equity Interests and Class 9 Section 510(b) Claims were deemed to reject the plan, and will be cancelled as of the Effective
Date. The Plan also provides for the Exit Facilities to facilitate the global reorganization.
The Plan provides
for a release of the Released Parties, their respective Related Persons, certain Holders of Claims, and their respective assets
and properties, by the Debtors, Reorganized Debtors and their Estates, as more fully set forth in Article VII.C of the Plan. The
Plan also provides for the release of each Debtor, Reorganized Debtor and Released Party by the Releasing Parties, as more fully
set forth in Article VII.D of the Plan.
The Effective
Date of the Plan will be the first Business Day after the Confirmation Date on which (a) no stay of the Confirmation Order is
in effect and (b) the conditions precedent to the Effective Date set forth in Article IX.A of the Plan have been satisfied or
waived in accordance with Article IX.A of the Plan.
Assets
and Liabilites
As of October
3, 2020, the Company had total assets of approximately $1,891,637,000 and total liabilities of approximately $2,494,848,000,
as disclosed in the Company’s most recent monthly operating report filed with the Bankruptcy Court on October 29, 2020 and
filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on October 30, 2020.
Treatment
of the Company’s Common Stock
As of November
1, 2020, the Company had 48,993,303 shares of common stock outstanding. Pursuant to the Plan, the Company’s common
stock outstanding immediately before the Effective Date will be canceled and of no further force or effect after the Effective
Date. No shares of the Company’s common stock will be reserved for future issuance in respect of claims and interests filed
and allowed under the Plan.
