How Quiksilver may find its way out of bankruptcy

On behalf of Macdonald Fernandez LLP posted in business and commercial bankruptcy on Wednesday, February 10, 2016.

In our last post, we highlighted a few reasons why it may be difficult for retailers to emerge from Chapter 11 bankruptcy. Given the changes in the U.S. Bankruptcy Code and the market for companies to facilitate going out of business sales to protect unsold assets, more retailers are apt to fold up their tents.

However, there are still companies who buck the trend. Southern California apparel maker Quiksilver is poised to be one of them. The embattled company known for making clothes that resonate with the surfing community filed for Chapter 11 bankruptcy protection in November 2015 so that it may restructure more than $600 million. Nearly three months later, it appears that the company has a plan that will allow it to emerge from bankruptcy.

The key components in the plan appear to be the sale of several entities that contributed to the company's debt load, including the sale of its snowboard maker and Hawk Designs. This allowed Quiksilver to focus on improving operational efficiencies and reducing its cost structure, all while strengthening its brand. The company still has more than 700 retail outlets throughout the United States.

Oaktree Capital Management will be the sponsor of Quiksilver's resurgence. The story exemplifies the importance of having experienced legal counsel while in the midst of a bankruptcy. A skilled attorney can properly evaluate offers and structure deals to ensure that new investors' money will be wisely spent, all while respecting procedural rules that govern repayment plans.

If you have questions about guidance through a commercial bankruptcy, an experienced attorney can help.

Tags: Business and Commercial Bankruptcy

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