Item 1.03. Bankruptcy or Receivership.
Pier 1 Imports, Inc. (the "Company") announced on February 18, 2020, that, among
other things, the Company and its subsidiaries (together, the "Debtors") each
filed a voluntary petition in the U.S. Bankruptcy Court for the Eastern District
of Virginia (the "Bankruptcy Court") requesting relief under Chapter 11 of Title
11 of the United States Bankruptcy Code (collectively, the "Chapter 11
Proceedings"). The Chapter 11 Proceedings are being jointly administered under
the caption and case number: In re Pier 1 Imports, Inc., et al., Case
No. 20-30805(KRH). On June 23, 2020 the Company filed with the Bankruptcy Court
the Amended Joint Chapter 11 Plan of Pier 1 Imports, Inc. and Its Debtor
Affiliates. On July 30, 2020 the Bankruptcy Court held a confirmation hearing.
Confirmation of Plan
On July 30, 2020, following the confirmation hearing held on that date, the
Bankruptcy Court entered the Order Confirming the Amended Joint Chapter 11 Plan
of Pier 1 Imports, Inc. and its Debtor Affiliates (as it may be amended,
supplemented or otherwise modified the "Confirmation Order"). The Confirmation
Order confirmed the Amended Joint Chapter 11 Plan of Pier 1 Imports, Inc. and
Its Debtor Affiliates (as it may be amended, supplemented or otherwise modified,
the "Confirmed Plan"). Copies of the Confirmed Plan and Confirmation Order are
filed as Exhibits 2.1 and 99.2, respectively, to this Current Report on
Form 8-K, and are incorporated by reference into this Item 1.03. Capitalized
terms used in this Current Report on Form 8-K and not otherwise defined will
have the meanings given to them in the Confirmation Order and Confirmed Plan.
Summary of Confirmed Plan
The Confirmed Plan provides that on the Effective Date of the Confirmed Plan a
Plan Administrator selected by the Term Lenders and consented to by the Company
will be appointed and empowered to implement the Confirmed Plan, collect and
distribute the proceeds from the liquidation of the Debtors and administer the
wind-down of the Wind-Down Debtors in accordance with the Confirmed Plan, in the
same fiduciary capacity as applicable to a board of managers, directors and
officers. Subject to the provisions of the Confirmed Plan, the Plan
Administrator will have all the rights, powers, and duties necessary to carry
out his responsibilities under the Confirmed Plan in accordance with the
Confirmation Order. Among other things, the Plan Administrator's
responsibilities include: (i) liquidating, receiving, holding, investing,
supervising, and protecting the assets of the Wind-Down Debtors; (ii) taking all
steps to execute all instruments and documents necessary to effectuate the
distributions to be made under the Confirmed Plan; (iii) employing, retaining,
terminating, or replacing professionals to represent it with respect to its
responsibilities; (iv) paying all reasonable fees, expenses, debts, charges, and
liabilities of the Wind-Down Debtors; (v) administering and paying taxes of the
Wind-Down Debtors, including filing tax returns; and (vi) exercising such other
powers as may be vested in it pursuant to order of the Bankruptcy Court or
pursuant to the Confirmed Plan, or as it reasonably deems to be necessary and
proper to carry out the provisions of the Confirmed Plan.
The Confirmed Plan provides for appointment of a Monitor to work cooperatively
with the Plan Administrator to ensure compliance with the Wind-Down Budget and a
Claims Representative to ensure an efficient and fair claims reconciliation
process and to oversee the prosecution of estate causes of action, among other
The Confirmed Plan creates nine classes of claims against and interests in the
Debtors. Holders of allowed claims in Class 1 (Other Priority Claims), Class 2
(Other Secured Claims), Class 3 (ABL Claims), Class 4 (Term Loan Claims) and
Class 5 (General Unsecured Claims) are entitled to receive certain
distributions, to the extent of available Distributable Proceeds after payment
of more senior claims pursuant to the Waterfall Recovery priority provisions of
the Confirmed Plan. Holders of claims in Class 6 (Intercompany Claims), Class 7
(Intercompany Interests), Class 8 (Interests in Pier 1) (which includes holders
of Pier 1 Imports, Inc. common stock) and Class 9 (Section 510(b) Claims) will
not receive any distributions or receive or retain any property under the
Confirmed Plan on account of such claims and interests. The Confirmed Plan also
provides for the establishment of reserves from which payment will be made of
Administrative Claims, Priority Tax Claims, Professional Fee Claims and for
purposes of resolving disputed claims and ongoing disputes, and funding various
costs and expenses associated with the administration of the Confirmed Plan and
the wind down of the businesses of the Wind-Down Debtors. The Confirmed Plan
reflects the terms of certain settlements among the Debtors and various creditor
constituencies that were accepted by the Debtors and such creditors, and
approved by the Bankruptcy Court, as being in the best interest of the Debtors,
their respective Estates, and holders of Claims and Interests, and fair,
equitable and reasonable.
The Effective Date of the Confirmed Plan will be the Business Day selected by
the Debtors on which: (a) no stay of the Confirmation Order is in effect;
(b) all conditions precedent specified in Article IX.A of the Confirmed Plan
have been satisfied or waived (in accordance with Article IX.B of the Confirmed
Plan); and (c) the Confirmed Plan is declared effective by the Bankruptcy Court.
The Effective Date is anticipated to occur between October 1, 2020 and
October 10, 2020.
The foregoing description is a summary of the material terms of the Confirmed
Plan, does not purport to be complete and is qualified in its entirety by
. . .
Item 3.03. Material Modification to Rights of Security Holders.
The Confirmed Plan provides that on the Effective Date, except as otherwise
specifically provided for in the Confirmed Plan, any certificate, share, note,
bond, indenture, purchase right, or other instrument or document, directly or
indirectly evidencing or creating any indebtedness or obligation of or ownership
interest, equity, or portfolio interest in the Debtors, or any warrants,
options, or other securities exercisable or exchangeable for, or convertible
into, debt, equity, ownership, or profits interests in the Debtors giving rise
to any Claim or Interest, will be canceled and deemed surrendered as to the
Debtors and the Debtors will not have any continuing obligations thereunder. The
Confirmed Plan further provides that the obligations of the Debtors pursuant,
relating, or pertaining to any agreements, indentures, certificates of
designation, bylaws, or certificates or articles of incorporation or similar
documents governing the shares, certificates, notes, bonds, indenture, purchase
rights, options, warrants, or other instruments or documents evidencing or
creating any indebtedness or obligation of the Debtors shall be fully released,
settled, and compromised.
The certificates, shares and ownership interests and related agreements,
purchase rights, options and warrants to be cancelled on the Effective Date
include all of the Company's common stock and related share purchase rights.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The Confirmed Plan provides that on the Effective Date the Company's board of
directors will be dissolved and any remaining officers will be dismissed. Each
of the Company's directors, Cheryl A. Bachelder, Robert L. Bass, Pamela B.
Corrie, Hamish A. Dodds, Brendan L. Hoffman, Katherine M. A. ("Allie") Kline,
Terry E. London, Steven G. Panagos, Michael A. Peel, Robert J. Riesbeck and Ann
M. Sardini, and the Company's remaining officers, including Robert J. Riesbeck,
Chief Executive Officer and Chief Financial Officer, will cease to be directors
and officers of the Company on the Effective Date.
Item 7.01 Regulation FD Disclosure
On August 31, 2020, the Debtors filed with the Bankruptcy Court their monthly
operating report for the period beginning July 1, 2020 and ending July 31, 2020
(the "Monthly Operating Report"). The Monthly Operating Report is attached
hereto as Exhibit 99.1 and is incorporated herein by reference. This Current
Report on Form 8-K (including the exhibit hereto) (this "Form 8-K") will not be
deemed an admission as to the materiality of any information disclosed herein.
The Monthly Operating Report and other documents filed with the Bankruptcy Court
are available for inspection at https://dm.epiq11.com/case/pier1. Documents and
other information available on such website are not part of this Form 8-K and
are not deemed to be incorporated by reference in this Form 8-K.
The information contained in this Item 7.01, including Exhibit 99.1, are not
deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), or otherwise subject to the
liabilities of that section, and are not deemed to be incorporated by reference
into any of the Company's filings with the Securities and Exchange Commission
(the "SEC"), whether made before or after the date hereof and regardless of any
general incorporation language in such filings, except to the extent expressly
set forth by specific reference in such a filing.
Cautionary Statement Regarding the Monthly Operating Report
The Company cautions investors and potential investors not to place undue
reliance upon the information contained in the Monthly Operating Report, which
was not prepared for the purpose of providing the basis for an investment
decision relating to any of the securities of the Company. The Monthly Operating
Report is limited in scope, covers a limited time period and has been prepared
solely for the purpose of complying with the monthly reporting requirements of
the Bankruptcy Court. The Monthly Operating Report was not audited or reviewed
by independent accountants, was not prepared in accordance with generally
accepted accounting principles, is in a format prescribed by applicable
bankruptcy laws or rules, and is subject to future adjustment and
reconciliation. There can be no assurance that, from the perspective of an
investor or potential investor in the Company's securities, the Monthly
Operating Report is complete. Results set forth in the Monthly Operating Report
should not be viewed as indicative of future results.
As reported in a Form 12b-25 filed by the Company on May 28, 2020, the Company
is not filing an Annual Report on Form 10-K for the fiscal year ended
February 29, 2020, or any other reports
on Forms 10-Q or 10-K for subsequent periods. Instead, the Company intends to
file Current Reports on Form 8-K containing the Company's monthly operating
reports that are filed by the Company with the Bankruptcy Court.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements contained in this Form 8-K and the Monthly Operating Report
may constitute "forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Exchange Act. The Company may
also make forward-looking statements in other reports filed with the SEC, in
press releases, in presentations and in material delivered to the Company's
stakeholders, including creditors and shareholders. Forward-looking statements
provide current expectations of future events based on management's assumptions
and assessments in light of past experience and trends, current economic and
industry conditions, expected future developments, and other relevant factors.
These statements encompass information that does not directly relate to any
historical or current fact and often may be identified with words such as
"believe," "expect," "estimate," "anticipate," "plan," "may," "will," "intend"
and other similar expressions.
Risks and uncertainties that may affect the Company's operations and performance
include, among others: risks and uncertainties associated with the Chapter 11
Proceedings; the effects of public health emergencies, including the COVID-19
pandemic; risks and uncertainties related to, and the impact of, the closure of
the Company's stores nationwide and its corporate headquarters, the length of
time its stores and corporate headquarters are closed and the associated costs
and loss of revenue and impact on liquidity; the failure by the Company to
identify, develop and successfully implement immediate action plans; the
inability of the Company to source, ship and deliver items of acceptable quality
to its U.S. distribution and fulfillment centers, stores and customers at
reasonable prices and rates in a timely fashion; risks related to outsourcing
certain business processes to third-party vendors, including disruptions in
business, cyber security threats and increased costs; an overall decline in the
health of the U.S. economy and its impact on consumer confidence and spending;
disruptions in the Company's domestic supply chain or e-commerce website;
failure to successfully manage and execute the Company's marketing initiatives;
the Company's access to adequate operating cash flow, trade credit, borrowed
funds and capital to fund its operations and pay its obligations as they become
due, including the impact of continued deterioration of the Company's financial
performance or adverse trends or disruption in the global credit and equity
markets; failure to attract, motivate and retain an effective management team or
changes in the cost or availability of a suitable workforce; risks related to
the Company's dependence on technology in the operation of its business; failure
to protect consumer data; risks related to cybersecurity and e-commerce related
fraud; factors beyond the Company's control, including general economic and
market conditions, fluctuations in the Company's financial condition; and
regulatory and legal risks.
The Company assumes no obligation to update or otherwise revise its
forward-looking statements even if experience or future changes make it clear
that any projected results expressed or implied will not be realized. Additional
information concerning these risks and uncertainties is contained in the
Company's Annual Report on Form 10-K for the fiscal year ended March 2, 2019, as
filed with the SEC and in the Company's other filings with the SEC.
Item 9.01 Financial Statements and Exhibits
(a) - (c) Not Applicable.
2.1 Amended Joint Chapter 11 Plan of Pier 1 Imports, Inc. and Its Debtor
99.1 Monthly Operating Report for the period beginning July 1, 2020 and
ending July 31, 2020
99.2 Order Confirming the Amended Joint Chapter 11 Plan of Pier 1
Imports, Inc. and its Debtor Affiliates
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