Item 1.01
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Entry into a Material Definitive Agreement.
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On August 31, 2020, J.Jill, Inc. (the Company), Jill Acquisition LLC (the Borrower) and each of their direct and indirect
subsidiaries (collectively, the Debtors) entered into a Transaction Support Agreement (the TSA) with the Consenting Lenders (as defined therein) and TowerBrook Capital Partners L.P. (along with certain of its affiliates,
collectively, Towerbrook) to support a financial restructuring of the Companys capital structure and indebtedness (the Transaction) on the terms set forth in the TSA. As of August 31, 2020, Consenting Lenders holding
more than 70% of the Existing Term Loans (defined below) have signed the TSA.
Pursuant to the TSA, including the term sheets attached thereto, the
Company will immediately begin seeking the consent of the term loan lenders representing 95.0% of the aggregate outstanding principal amount of the term loan claims (the Consent Threshold) under the Companys existing term loan
facility (the Existing Term Facility and, the lenders thereunder, the Existing Term Lenders) to consummate an out-of-court transaction on the
terms and subject to the conditions set forth in the out-of-court term sheet attached as Exhibit A to the TSA (the Out-of-Court Term Sheet and, such transaction, the Out-of-Court Transaction). The Out-of-Court
Transaction contemplates that the Companys trade creditors will be unimpaired and paid in full, and would be implemented through the following series of transactions (a) an amendment of the Companys Existing Term Loan Facility, to,
among other things, waive any non-compliance with the terms of the Exiting Term Facility, (b) the incurrence of a new senior secured priming term loan facility (the Priming Facility) which
will be used to repurchase the term loans under the Existing Term Facility (the Existing Term Loans) of Consenting Lenders (as defined in the Out-of-Court
Term Sheet), (c) an amendment of the Companys existing ABL credit facility (the ABL Facility and, the lenders thereunder, the Existing ABL Lenders), to, among other things, waive any
non-compliance with the terms of the ABL Facility, and (d) the provision by TowerBrook and certain other investors (collectively, the Junior Facility Lenders) of new capital pursuant to a
junior term loan facility (the Junior Facility).
To the extent that the necessary consents to reach the Consent Threshold for the Out-of-Court Transaction are not obtained by September 11, 2020 (as may be modified or extended pursuant to the terms of the TSA, the Out-of-Court Toggle Date), the Company will implement the Transaction on an in-court basis through a prepackaged chapter 11 plan (the Plan)
consistent with the terms of the TSA and the prepackaged chapter 11 term sheet (the Chapter 11 Term Sheet) attached as Exhibit B to the TSA (the In-Court Transaction and together
with the Out-of-Court Transaction, the Transactions), which shall be implemented through (a) the commencement by the Debtors of voluntary cases under
chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101 1532 (as amended, the Bankruptcy Code and such cases, the Chapter 11 Cases), (b) the incurrence of a super-priority debtor-in-possession delayed draw term loan credit facility (the DIP Facility) to fund, among other things, working capital during the Chapter 11 Cases, and
(c) upon emergence, the incurrence of (i) a new first lien term loan credit facility (the Exit Facility) on the Plan Effective Date (as defined below) to fund, among other things, working capital of the Company after the Plan
Effective Date, (ii) the cancellation of the existing common stock and the issuance of new common stock (New Common Stock) to the holders of the Existing Term Loans (subject to dilution), and (iii) the unimpairment and
payment in full of general unsecured trade creditors.
Pursuant to the TSA, among other things, the parties have agreed to support and cooperate with each
other in good faith, to coordinate and to use their respective commercially reasonable efforts to consummate the Transaction as soon as reasonably practicable on the terms set forth in the TSA.
The Company expects ordinary-course operations to continue substantially uninterrupted during and after the commencement of the Transaction. Employees should
expect no change in their daily responsibilities and to be paid in the ordinary course of business.
Material Terms of the TSA and the Transaction
Generally, the TSA and the Transaction contemplate, among other things, the following transactions and changes to the Companys capital structure
and governance, as described in more detail below.