Alex and Ani, Inc.

DEBTORS AND THEIR BUSINESSES

The Debtors include the following companies that work together to design, create, market, and sell Alex and Ani branded jewelry products:

• Alex and Ani, LLC
• A and A Shareholding Co., LLC
• Alex and Ani International, LLC
• Alex and Ani Retail, LLC
• Alex and Ani Assembly, LLC
• Alex and Ani California, LLC
• Alex and Ani Canada, LLC
• Alex and Ani Puerto Rico, LLC
• Alex and Ani South Seas, LLC

THE ALEX AND ANI BRAND WILL SURVIVE

According to the proposed Plan and Disclosure Statement, which were just filed, the Alex and Ani Debtors will take one of two paths out of bankruptcy. The Plan states that it features a “toggle” option, whereby the Debtors will proceed with a simple restructuring of debt while simultaneously conducting a marketing process for the sale of all or some of their assets. If the Debtors are able to find a willing and able buyer on good terms, then the Plan will “toggle” to the sale option.

In either scenario, the Alex and Ani brand will likely survive. The reorganized Debtors will continue to market and sell Alex and Ani branded jewelry if the simple restructuring plan is confirmed. While a sale is inherently less predictable because the potential buyer has yet to be identified, it is likely that Alex and Ani is worth more as a going concern brand than its simple asset value. So, even after bankruptcy, consumers will likely be able to purchase Alex and Ani jewelry.

The Debtors have stated that they intend to close about a third of their stand-alone retail store locations. Like many retailers, the Debtors struggled with store closures related to COVID-19. Alex and Ani will continue to partner with department stores and sell their products direct to consumer online. It is likely that this will be the case whether the Debtors do a simple reorganization or a sale.

UNSECURED CREDITOR RECOVERIES ARE UNKNOWN

Typically, when a Chapter 11 case has a filed Plan and Disclosure Statement, creditors have some idea of what the debtors intend to repay their creditors. In the Alex and Ani case, a Plan and Disclosure Statement were filed on June 11, but they contain blank spots in the unsecured creditor repayment disclosures. So, unsecured creditors remain in the dark as to the implications of the Plan.

The lack of disclosure is likely due to the “toggle” Plan. It is possible that creditors will receive different amounts depending on whether the confirmed Plan provides for a straight restructure or a sale. The Debtors are marketing a sale of some or all of their assets, meaning they do not know whether they will have sale proceeds to distribute to creditors or the amount of proceeds they may receive. So, unsecured creditors are in the dark about how much they may or may not receive on account of their pre-petition claims.

If the Debtors proceed on their proposed timeline, they will be exiting bankruptcy within 3 months. These large cases are going on super fast timelines these days and creditors are having to act fast and speak out to make their voices heard. If you are a creditor of Alex and Ani and have any questions about this case, please reach out to PRLT.