Charlotte Russe’s $124 Million Restructuring

Cooley advised fashion retailer Charlotte Russe, a former portfolio company of private equity firm Advent International, on its recent out-of-court restructuring transaction. Partners Seth Van Aalten, Ron Hopkinson and Eric Schwartzman and special counsel David Silverman led the team advising the company.

The transaction reduces the company’s term loan debt by $124 million, lowers annual interest expense by nearly half and extends maturity to December 2022. In exchange, the term lenders will receive 100% of the company’s equity, subject to dilution from a management equity incentive plan.

The transaction is without precedent in retail restructuring. Outside of Chapter 11, no retailer has managed to simultaneously renegotiate with its landlords across a nearly 600 store fleet, retain key management and gain the unanimous support of second lien creditors.

Charlotte Russe, Inc. provides specialty stores and online retailing services for casual apparel and accessories, catering to young women in the United States. The Firm, led by Jennifer J. Ming, is based in San Diego (CA).

Cooley advised Charlotte Russe with a team including Seth Van Aalten (Picture), Ron Hopkinson, Eric Schwartzman, David Silverman, Patrick Flanagan, Jeremy Naylor, Barbara Mirza, Joshua Friedman, Amanda Fant and Summer M. McKee.

Involved fees earner: Seth Van Aalten – Cooley LLP; Eric Schwartzman – Cooley LLP; Summer McKee – Cooley LLP; Ron Hopkinson – Cooley LLP; David Silverman – Cooley LLP; Patrick Flanagan – Cooley LLP; Amanda Fant – Cooley LLP; Jeremy Naylor – Cooley LLP; Barbara Mirza – Cooley LLP; Joshua Friedman – Cooley LLP;

Law Firms: Cooley LLP;

Clients: Charlotte Russe Inc.;

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Author: Ambrogio Visconti