Bankruptcy Court Confirms Revised Chapter 11 Plan for Nine West Holdings, Inc.
The U.S. Bankruptcy Court for the Southern District of New York has confirmed Nine West Holdings' Third Amended Joint Plan of Reorganization after nearly eleven highly contentious months of proceedings. Friedman Kaplan represented the indenture trustee for Nine West’s $250 million senior unsecured notes due in 2034. After the official committee of unsecured creditors decided to support, rather than oppose, the proposed plan, Friedman Kaplan, along with counsel for the 2019 notes, became lead trial counsel, on extremely short notice, opposing confirmation of the proposed plan. The trial was fast-paced and intense, and in her opinion approving the plan, Judge Shelley C. Chapman described the efforts of counsel as “Herculean.”
Friedman Kaplan's efforts at trial challenging the Second Amended Plan succeeded in achieving a negotiated Third Amended Plan that substantially improved recoveries for the Nine West noteholders and trade creditors as a group. The recoveries could go substantially higher depending on the resolution of claims placed in a litigation trust, which Friedman Kaplan has been retained to represent.
In 2014, Nine West was taken private in a leveraged buyout by private equity sponsor Sycamore Partners, which then by pre-arrangement sold certain of the company's prime assets to entities it controlled. Nine West filed for bankruptcy in April 2018, and in October, creditors sought court permission to sue Sycamore, claiming that the sales following the leveraged buyout were made at below fair market value at a time when the company was insolvent. While some creditor groups ultimately came to support the reorganization plan based on negotiated changes that increased their recoveries, our client as well as the 2019 trustee elected to challenge the plan at trial.
The confirmed Third Amended Plan settled the claims against Sycamore and placed other claims in the litigation trust. Nine West emerged from bankruptcy in March 2019 as Premier Brands Group Holdings LLC.
"The Nine West litigation demonstrated one of the things our firm is known for: the ability to quickly grasp complex issues and present them capably at trial," said partner Robert J. Lack. "We are very pleased with the results obtained for our client and the noteholders and trade creditors who will benefit from the revised plan."
Mr. Lack led a trial team that included partners Edward A. Friedman, Robert S. Smith, Eric Seiler, Andrew W. Goldwater, Mala Ahuja Harker, Jeffrey C. Fourmaux, Christopher M. Colorado, counsel Stan Chiueh, and associates Priyanka K. Wityk and Geoffrey Cajigas.