Court Approves Chapter 11 Reorganization Plan for Furla USA

January 28, 2021 - This morning, The U.S. Bankruptcy Court for the Southern District of New York confirmed Furla USA’s Plan of Reorganization under Subchapter V of Chapter 11 less than three months after it filed for Chapter 11 relief because of the ongoing COVID-19 pandemic.

While in Chapter 11, Furla USA shed unprofitable leases, reorganized its workforce, and strengthened its capital structure. On February 12, the Plan will go effective and Furla USA will emerge from Chapter 11 as a niche, boutique-style luxury goods company with a healthy balance sheet. As reported by WWD as well as on Yahoo! Finance, “at the remote hearing, Judge Chapman gave her approval to the plan and observed the case had gone so smoothly that ’this case from the outset and through today has been a model of how this ought to go.’”

Furla USA is a solid company with a superb brand and fundamentals that, like so many other companies, was punched in the gut by the pandemic. The bankruptcy filing offered it the opportunity to shelter in place for just as long as it needed to figure out how to fight its way through the pandemic and then, using the streamlined processes of subchapter V, very quickly emerge as a reorganized company with a right-sized retail footprint and an internal blueprint for future success.

For the bankruptcy lawyers who worked on this case, who have seen the Chapter 11 process often be simply a mechanism for asset sales, this type of quick successful reorganization that enables the company and its employees to continue and engage in commerce, is very personally and professionally satisfying.

Joseph T. Moldovan, Michael S. Barry, David J. Kozlowski, and Sally Siconolfi handled the matter.