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Quiksilver Approved to Leave Chapter 11 Protection

Posted on in Bankruptcy
Quiksilver Approved to Leave Chapter 11 Protection

Surfwear brand Quiksilver, Inc., which owns apparel brands Roxy and DC shoes, was granted permission to exit Chapter 11 bankruptcy in late January 2016. The California-based apparel and retail company filed for Chapter 11 bankruptcy in 2015 after years of slumping sales, largely due to the rise of fast fashion brands like H&M and a decreased interest in the surf and skate lifestyle.

In a Chapter 11 bankruptcy, a company restructures to repay its debts and allow it to recover. For Quiksilver, this meant selling lower-performing labels and focusing on its core three brands, Quiksilver, Roxy, and DC. It has now reached an agreement by which its senior creditor, Oaktree Capital Management LP, has paid $14 million in cash and a percentage of equity in the company to become its largest shareholder.

Time will tell whether the company will recover from its economic difficulties and thrive. Only the American Quiksilver brand filed for bankruptcy – this filing does not affect Quiksilver's European or Asian brands.
Leaving Bankruptcy Protection

Bankruptcy protection refers to the state of being involved in an active bankruptcy case, during which the indebted company works to restructure to prepare itself for a more productive future. When the company leaves bankruptcy protection, this means that it begins to operate under the new structure it established with its creditors and the court. In Quiksilver's case, the restructuring process took approximately one year to complete. Sometimes, it can take much longer, especially if there are disputes regarding the value of the company's assets or the best way for it to restructure. If you are considering filing for Chapter 11 bankruptcy, you will need to have your company accurately appraised by a qualified appraiser. Otherwise, you could potentially enter the restructuring process without an accurate figure for your company's value or have to have it appraised again, which can become fairly time-consuming.

As the new majority shareholder, Oaktree Capital Management LP will have a significant say in how Quiksilver operates. Since filing for Chapter 11 bankruptcy, it closed a significant number of its retail stores and factory outlets in the United States. Paring down its offerings allowed it to cut its costs and focus on becoming a profitable company once more.

Work with a Chicago Bankruptcy Attorney

Bankruptcy stories vary wildly. Sometimes, filing for bankruptcy is the first chapter in a company's great success story. Other times, it marks a failed attempt to recover losses that ultimately leads to further loss and closure. The effect that bankruptcy will have on your company depends largely on other factors present. One of these factors is the legal representation of a competent bankruptcy attorney. By working with an experienced attorney, you can understand the issues present in your bankruptcy case and prepare yourself better to face it. To get started with our team of experienced Chicago bankruptcy attorneys, contact Newland & Newland, LLP today to schedule your initial legal consultation and begin working on your case with us.

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