Former Rubie’s Costume files Chapter 11 plan, disclosure statement

By Sarah Lizee

Olympia, Wash., Jan. 28 – RCCI Wind Down Co., Inc., formerly Rubie’s Costume Co., Inc., filed a Chapter 11 plan of liquidation and related disclosure statement Tuesday in the U.S. Bankruptcy Court for the Eastern District of New York.

The plan provides for the liquidation of the debtors and the distribution to creditors of the debtors’ cash and the cash proceeds that they received in consideration for the sale of substantially all of their assets during the Chapter 11 cases to Rubie’s II, a joint venture comprised of a multi-billion-dollar investment fund and a strategic operator, which closed on Oct. 2.

The company said the sale enabled the debtors to realize the going-concern value of their businesses and avoid a piecemeal liquidation of their assets, which maximizes the value of their estates for the benefit of creditors and other stakeholders.

As a result of the sale, the secured debt of debtor-in-possession lender JMB Capital Partners Lending, LLC and a bank group including Bank of America, NA, Wells Fargo Bank, NA, JPMorgan Chase Bank, NA, TD Bank, NA, Citibank, NA and HSBC Bank, USA, NA was paid in full by the buyer.

The debtors’ post-petition trade payables were assumed by the buyer and are no longer obligations of the debtors.

The debtors retained $7 million in cash on hand as well as additional cash reserved for payment of costs and expenses accrued prior to closing of the sale contained in the debtors’ DIP financing budget, and received an additional $1.45 million in cash from the buyer after a purchase price dispute was settled through mediation between the debtors, buyer and official committee of unsecured creditors.

Also, $4.25 million was required to be placed in a dedicated reserve account and the funds held in escrow for the purpose of funding distributions to general unsecured creditors.

The sale order required that the general unsecured claim reserve may not be accessed for any purpose other than funding distributions to general unsecured creditors without the committee’s prior written consent or as required by court order.

Additionally, some holders of equity interests in the debtors from the Beige family who received a minority interest in the buyer consented to the waiver of $2.6 million in shareholder loans to debtor Buyseasons, $6 million in pre-petition rent claims, and $2 million in post-petition administrative rent claims.

Administrative claims, priority tax claims and professional fee claims will be paid in full.

Holders of secured claims will receive payment in full in cash, plus post-petition interest, if any, or they will receive the collateral securing their claims.

Holders of other priority claims will receive cash equal to the unpaid portions of the claims.

Intercompany claims and equity interests will be eliminated with no distribution.

Melville, N.Y.-based Rubie’s designs, manufactures and distributes Halloween costumes and accessories. The company filed bankruptcy on April 30, 2020 under Chapter 11 case number 20-71970.

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