Jeans maker True Religion Apparel Inc. filed for bankruptcy for the second time in less than three years, saying it had no choice as government stay-at-home edicts shut down nonessential stores nationwide, WSJ Pro Bankruptcy reported. The company filed for chapter 11 protection in the U.S. Bankruptcy Court in Wilmington, Del., yesterday, blaming liquidity constraints and the COVID-19 pandemic. True Religion, based in Manhattan Beach, Calif., has furloughed the bulk of its employees, according to court papers. The company said that it “would have preferred to wait-out the current instabilities of the financial markets and retail industry generally,” but couldn’t afford to. The company plans to pursue either a sale or a reorganization and intends to decide between the two strategies in mid-May, according to court documents. The pandemic has forced the closure of the company’s 87 retail stores and its wholesale business, eliminating 80% of revenue and making a chapter 11 filing “unavoidable,” True Religion interim Chief Financial Officer Richard Lynch said in a sworn declaration. Of True Religion’s 1,010 employees, only 76 are still working full time, according to his declaration. The company owes roughly $140 million in secured debt and has proposed taking out nearly $89 million in bankruptcy financing to keep basic operations funded during the chapter 11 process.
