US denim retailer True Religion has filed for bankruptcy and has signed a restructuring agreement with a majority of its lenders.
The company filed for creditor protection under Chapter 11 in the US bankruptcy court in the District of Delaware.
The restructuring agreement with lenders, including its private equity owner TowerBrook Capital Partners, is expected to reduce the company’s debt by more than $350m (£271m).
True Religion president and chief executive John Ermatinger said in a statement: “After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion’s iconic brand and position the company for future growth and success.”
He added that the business will continue as normal to provide its employees and business partners “the long-term stability they need”.
It is not yet clear how the decision will affect the UK business. True Religion has been contacted for further information.
The retailer has secured post-petition debtor-in-possession financing – a form of financing for companies in financial distress – from Citizens Bank for up to $60m (£46m).
It said the restructuring plan provides for full payment of claims relating to its continuing trade creditors, including vendors, suppliers and landlords.
It has also filed a motion to pay purchase orders issued before the petition date, but which “have not yet come due”.
The retailer expects confirmation from the bankruptcy court to take around 90 to 120 days.