Istithmar in Successful Consummation of Loehmann's Chapter 11 Plan

March 1, 2011

Cleary Gottlieb represented Istithmar Retail in connection with the Chapter 11 proceedings of its portfolio company, Loehmann’s Holdings. On March 1, 2011 Loehmann’s emerged from bankruptcy protection, just 3 1/2 months after commencing a pre-negotiated Chapter 11 case that was overwhelming supported by creditors in all creditor classes. Under the restructuring plan approved by the court, Istithmar and senior secured noteholder Whippoorwill Associates, a White Plains, New York-based investment manager, backstopped a $25 million rights offering to senior bondholders, providing the funds necessary for the restructuring. As a result of the backstop arrangement, as well as their existing bond positions, Istithmar and Whippoorwill received board selection rights and a substantial ownership stake in reorganized Loehmann’s. Through an expedited and consensual process, Loehmann’s emerged with a stronger balance sheet, including the elimination of $110 million in long-term debt, and avoided liquidation unlike many recent retailers in bankruptcy.

Loehmann’s is a 90-year-old retailer best known for its discounted prices for designer apparel.