On Sept. 22, a Delaware judge okayed Alex and Ani’s Chapter 11 reorganization, wiping out much of the company’s prior debt.
The plan called for Lion Capital to purchase debt formerly owed to a consortium of banks—so going forward, the London-based investment fund will own 65% of the company, a boost from its pre-bankruptcy 59% stake.
The other 35%—formerly controlled by the company’s founder, Carolyn Rafaelian—has been sold to the Bathing Club LLC, which is owned by celebrity attorney and cable TV mainstay Mark Geragos, who has previously served as company counsel for Alex and Ani.
The top-selling charm company first filed for Chapter 11 in June, citing the pivot away from brick-and-mortar retail and organizational upheaval. The bankruptcy plan called for Alex and Ani to put itself up for sale, but an auction scheduled for Sept. 7 was canceled when no qualified bids were received.
The company’s initial board will include five people. Three will be Lion Capital appointees—fund partners Lyndon Lea and Sherif Guirgis, as well as former Pandora exec Scott Burger, who has chaired Alex and Ani’s board since last year. Also serving on the board will be Geragos and Lawrence Meyer, the board’s sole independent director. Meyer is the former CEO of casual wear company Uniqlo and has also served as a board member of Charming Charlie, another jewelry company that filed for Chapter 11.
The restructuring plan includes settlements of litigation with Rafaelian and former senior vice president of operations David Medeiros. The settlement says that Rafaelian will resign from the company’s board but that she is now free to start a new jewelry company.
The restructuring plan “[will] equitize 100% of the debtors’ funded debt obligations, provide meaningful cash recoveries to go-forward trade vendors, and secure $4.5 million of new capital to fund distributions under the plan and go-forward capital needs,” said chief restructuring officer and interim CEO Robert Trabucco in a filing.
Trabucco, a former chief financial officer for Signet, took over the company last year after Rafaelian stepped down. It is not clear if he will stay with the company. He did not return a request for comment by publication time.
The company’s bankruptcy papers can be seen here.
(Photo courtesy of Alex and Ani)
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